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Helping build cities through anchor institutions

Leveraging nonprofit resources to improve local economies
This spring, SA+P’s Community Innovators Lab and The Democracy Collaborative at the University of Maryland co-hosted a forum at MIT to announce key findings of a joint case study on how nonprofit institutions can improve local economies.

The study examined a program undertaken by Cleveland OH’s University Hospitals (UH) — a five-year, $1.2B growth plan that included commitments to purchase from local, minority- and women-owned businesses as much as possible during the largest expansion in the health system’s history. Lead author of the report was SA+P’s Farzana Serang MCP ’12.

The program’s design, and its success, is seen as a promising new approach to community economic development through leveraging the resources of ‘anchor institutions’ that have a vested interested in the success of their surrounding community. Place-based institutions such as hospitals and universities — often referred to as ‘eds and meds’ — spend more than $1 trillion annually on goods and services; by rethinking the way they do business, such institutions can have a significant impact on local economies, the study found.

"Community and healthcare leaders are discovering that hospitals can help heal entire cities through economic development," said UH CEO Tom Zenty. "We can overcome historical barriers that have kept women and minority businesses out of the mainstream. And we can earn the trust and goodwill of our neighbors so that we can better fulfill our nonprofit mission of helping and healing."

To maximize the impact of their program, UH established specific targets, hired a third-party organization to hold it accountable and voluntarily entered into a unique Project Labor Agreement to ensure buy-in from local trade unions. The determination on the part of the Mayor and UH’s leadership to build an inclusive economy was striking, according to report co-author J. Phillip Thompson, associate professor in SA+P’s Department of Urban Studies and Planning.

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