Working with philanthropy in the development of local housing strategies
Overview
Philanthropic organizations can be helpful partners to cities, towns, and counties working to develop a local housing strategy. For example, philanthropies can convene stakeholders to facilitate the engagement of practitioners and advocates, provide financial support for planning efforts (such as a housing needs assessment), or invest in public-private ventures, such as an acquisition fund to support rental housing preservation. Philanthropies can also contribute by making complementary investments that support the locality’s housing goals, such as by building the capacity of local nonprofit developers.
This brief discusses the benefits of working with philanthropic organizations and how localities can engage them in supporting the development and implementation of a housing strategy.
Background
Why localities may want to work with philanthropies
The term “philanthropic organizations” (which we use interchangeably here with “philanthropies”) encompasses several different kinds of charitable organizations. These include community foundations, corporate foundations (and corporate giving, generally), and non-corporate charitable foundations, among others. Typically, philanthropies provide grants and/or make investments at below-market interest rates, but they also play other important roles in local communities, such as convening stakeholders and serving in civic leadership roles.
Perhaps the most common reason localities seek out opportunities to work with philanthropic organizations is that they are a source of funding. Among other benefits, philanthropic funding is often more flexible than federal and state funds. Whether used as the sole funding source or as a supplement to a publicly funded project, philanthropic funding can help localities design projects with elements outside of what publicly funded projects may allow. For example, with philanthropic funding a locality may be able to provide housing assistance to households with incomes over the low-income thresholds often stipulated by federal and state funds as part of a mixed-income project.
Philanthropic organizations can also support a local housing strategy by convening stakeholders to discuss the locality’s housing needs and how the city and stakeholders can work together on a shared issue of interest. They can also build coalitions to address issues over the long term, such as a strategy to boost minority homeownership or a campaign to create and sustain a housing trust fund through real estate transfer taxes or deed recording fees. Having a philanthropic sponsor can raise awareness of a policy or project and encourage other organizations to support it politically or financially. This may be especially true if a well-known philanthropic organization is involved. In these cases, the philanthropy’s support may indicate to others that the policy or project is well-conceived and likely to yield the desired impacts. As a consequence, other organizations may want to show that they too are important supporters of the effort for their publicity and merit. Regardless of a philanthropy’s motivation, they can be key players in convening stakeholders or building cross-sector coalitions that provide opportunities for important, positive changes in communities.
Philanthropies can also contribute their expertise to support local projects. Philanthropies that have focus areas, such as housing or workforce development, can be valuable thought partners for local government. They may share advice based on learning from past grantmaking or hire a consultant on behalf of the locality to conduct a study or do an environmental scan to support city policymaking and program.
Why philanthropies may want to work with localities
Philanthropic organizations are often motivated to work with localities by a shared sense of mission. Philanthropies that have housing, equity, racial justice, or community development as part of their mission may be particularly interested in working with localities on housing strategies. Philanthropies with a general commitment to strengthening the vitality or quality of life of a locality may also be open to partnerships.
Philanthropies may choose to work with localities in several ways. Below are a few examples adapted from the article “Philanthropist’s Guide to Working with Government and Local Communities,” published by The Bridgespan Group.
Philanthropic organizations generally recognize the important role of local government leadership in change-making. For this reason, some philanthropies will work with cities to help build local capacity among staff. For example, Bloomberg Philanthropies helps strengthen city capacity through a range of resources, including the Bloomberg Cities Network (a partnership with the Johns Hopkins University) and its philanthropic consulting arm, Bloomberg Associates. Several foundations fund professionals to work within city agencies through the nonprofit FUSE Corp.
Philanthropies generally understand that local government has the resources and regulatory power to innovate at the policy and program level. In search of solutions to widespread problems that can be replicated elsewhere, many philanthropies are interested in supporting innovation in local government. Foundation programs to support innovation in local government related to housing and community development include JPMorgan Chase’s AdvancingCities and PRO Neighborhoods programs and Bloomberg Philanthropies’ What Works Cities program, among others.
Finally, philanthropies want to know what works. Many philanthropies fund evaluation work to measure the effectiveness of local government programs and identify what approaches work and which do not. NYU’s Housing Solutions Lab is an example of a foundation-funded initiative to support the evaluation of local housing strategies.
Approach
Engaging philanthropies in the development of local housing strategies and programs
A localities’ relationship with a philanthropy may not start with a particular project in mind but rather with a relationship that builds over time and leads to the generation of ideas around how they may work together. Localities may want to take some time to get to know a philanthropic organization, learning about their goals and interests, prior to approaching them with a request for funding. This type of approach may lead to a more sustainable, long-term relationship in which the two parties work together to address several issues.
There may also be times when a locality may want to approach a philanthropy with a particular project in mind. In these cases, it may make sense for the locality to have informal discussions with the philanthropic staff early in the project design process to communicate the locality’s ideas and receive feedback/input from the philanthropy on what they may be interested in funding. Ultimately, the locality will need a well-developed plan to formally apply for funds.
Regardless of the locality’s approach to establishing a relationship with a philanthropy, they will want to talk regularly with philanthropies to nurture the relationship and maintain two-way communication around priorities and interests. One way a locality might do this would be by having periodic check-in meetings and briefing sessions in addition to any reports on activities that the philanthropy may be funding.
Broadly speaking, there are two main ways that localities can involve philanthropic organizations in their local housing strategies. One approach is to engage philanthropies to help the locality develop a comprehensive local housing strategy or a targeted strategy focused on a particular issue, like an anti-displacement strategy. For example, philanthropies might fund a housing needs assessment, convene stakeholders to brainstorm ideas for strengthening the locality’s housing strategy or fund a staff member dedicated to supporting the development of a local housing strategy.
A second approach is to ask a foundation to help with a specific project identified as a priority in the locality’s housing strategy. For example, a philanthropy may be interested in funding an early warning system to identify areas vulnerable to gentrification, which would support the localities’ anti-displacement strategy or agree to invest in an acquisition fund to support the acquisition of land for future affordable development.
If seeking to engage a philanthropic organization in the development of its housing strategy, localities could engage the philanthropy by:
- Inviting the philanthropy to join an advisory committee to inform or oversee the development of a local housing strategy.
- Asking the philanthropy to participate in planning meetings, such as meetings held before launching the local housing strategy development effort or in the early stages of gathering information on community needs.
- Working with the philanthropy to organize a convening of stakeholders to gather input for the local housing strategy.
In addition to involving a philanthropy in the planning process, it can be valuable for localities to create opportunities for philanthropic organizations to have ongoing involvement in program implementation. Philanthropic organizations can be critical partners during the implementation phase by providing project funding, helping with coalition-building, and supporting program evaluations.
Considerations
Considerations for localities when approaching philanthropies
When approaching philanthropic organizations to forge a partnership, it is important to find areas of common interest. The sections above describe some of the motivations of philanthropies in general, but it will be important for localities to learn more about the specific missions of philanthropies operating in their areas.
It is important for the locality to build rapport and trust with the philanthropy by showing that it has the potential to be a strong partner. This may be done by the locality demonstrating that it has the capacity to implement successful projects and be innovative and needs philanthropic support to fund projects that cannot be funded through other resources, such as state or federal funds.
Once a relationship with one philanthropy organization is established, localities may want to ask the staff of this organization about which other organizations might be interested in the work the locality is doing to start to build coalitions or networks of support for local projects. Philanthropic staff may also help by making introductions to these groups.
Staying in touch and tracking the progress of any joint projects is a good way to continue to cultivate a strong relationship with philanthropic organizations. Localities may want to discuss ideas for future projects during briefing sessions or meetings with the philanthropy on existing projects to help the partnership grow.
Examples
House ATL is a cross-sector stakeholder group that created a housing affordability action plan for the city of Atlanta. The initial convening that spurred on the project included The Arthur M. Blank Family Foundation, Urban Land Institute-Atlanta, Central Atlanta Progress, Center for Civic Innovation, and Metro Atlanta Chamber of Commerce and has grown to include over 200 civic leaders including the City of Atlanta. House ATL is an example of a housing strategy driven by philanthropy and civic partners in which the locality is a participant, rather than the principal proponent. The group has developed a housing strategy that identifies key principles under which both the public and private sectors can operate to create and preserve affordable housing in Atlanta. Funded initially with resources from the original convenors, House ATL has now established a Funder’s Collective which pools resources from public, philanthropic and private entities to support the development of affordable housing in Atlanta.
The Denver Regional Transit-Oriented Development (TOD) Fund managed by the Enterprise Community Loan Fund was established by Denver area public, private and philanthropic partners to support the acquisition of land surrounding transit stations. The Loan Fund is capitalized by contributions or investments from a mix of local and national foundations, including The Denver Foundation, the Rose Community Foundation, the Ford Foundation, the Gates Family Foundation, and the John D. and Catherine T. MacArthur Foundation. The fund provides low-cost loans to help affordable housing developers acquire land around transit stations and along transit corridors which is often unaffordable due to land speculation. The fund aims to support development of 1,000 units of affordable housing in the Denver region which is in the process of one of the nation’s largest transit expansions.
Charlotte, NC has joined forces with nonprofit and private-sector partners to invest in affordable housing in the city. Spurred by a report prepared by local advocates that identified patterns of segregation in the city, the city developed a collaborative plan to raise funds for new development of housing units. To date, the City has raised $50 million through general obligation bonds and for-profit financial institutions have contributed over $70 million. Under this public-private initiative, the Local Initiatives Support Coalition will manage a $50 million loan fund. Through this effort, the city and its partners aim to: increase their capacity to serve households with incomes less than 60% of the area median income; serve residents vulnerable to displacement; and increase residents’ access to opportunity.
The Kresge Foundation has funded multiple entities to support housing and health planning. In 2019, the Yakima Valley Conference of Governments was one of 20 organizations granted funds to develop a regional plan to address housing issues. Recognizing the need to connect housing and health, Kresge has funded these organizations to develop community-driven strategies and activities to preserve and increase the supply of affordable housing with the understanding that stable housing can improve the health and well-being of low-income individuals and families.
The Richard King Mellon Foundation and the City of Pittsburgh have worked closely together for decades. In 1957, the City of Philadelphia and Richard King Mellon joined forces to create ACTION-Housing to support the creation of quality, affordable housing. Since that time, ACTION-Housing, which sits on the City’s Affordable Housing Task Force, has supported the creation of over 4,500 units and offered social services to people of all backgrounds. Over the years, the Richard King Mellon Foundation has supported numerous activities, partnering with the city and several nonprofits on a variety of housing and community development efforts.