This new report from The Democracy Collaborative and the Responsible Endowments Coalition seeks to connect struggling communities to local institutional wealth through engaging student activism. The report profiles three administration-led initiatives and three student-led initiatives, as well as five potential future partnerships, where institutional investments are directed into local communities in a way that empowers low-income residents, develops small businesses, and generates sustainable economic development.
This paper seeks to identify ways to better connect two disparate realities that can be found side by side in America today: the growing needs of struggling communities and the vast but detached institutional wealth to which they are home. While communities across the United States continue to suffer in the wake of the financial crisis and the Great Recession, huge pools of investment capital are often to be found sitting right next door. America’s colleges and universities collectively own over $400 billion in assets via their endowments. As permanent place-based “anchor” institutions, many of these universities are well positioned to serve as critical drivers of community development. Looking at their current investment behavior, however, it is clear that America’s universities—supported as they are by public funds and beneficial tax treatment— could be doing much more to directly support low-income people, small businesses, and sustainable community economic development. At the same time, new socially conscious and economically focused student movements are increasingly active on campuses across the country. The potential for a far greater level of community investment by universities, spurred on by students and others, is obvious.
In June 2012, the Responsible Endowments Coalition and The Democracy Collaborative began research to explore student involvement in university- led community investment, and to understand where community need and institutional wealth could be made to intersect. This paper is the result of that research. In conducting the interviews upon which it is based, we found that if students, faculty, community members and organizations, and college administrations can be brought together, it is far more likely that long-term investment by universities in a manner that prioritizes real community needs and interests will occur.
“Community investment” takes many different forms, but for the purposes of this paper it is defined as directing financial resources into the local community in a way that empowers low income residents, small businesses, and sustainable economic development. Often—although not always—investments are made via community development financial institutions (CDFIs) with defined missions to provide financial services to underserved populations in a fair manner. Such an approach seeks to ensure bottom-up sustainable community development by placing greater power and control in the hands of community actors.
Over three months our research team interviewed fifteen students, administrators, and university community members. We narrowed our profiled case studies to three administration-led initiatives and three student-led initiatives on university community investment to examine what worked and what did not. The paper also analyzes five case studies that demonstrate potential for future university community investments. Ultimately, we found great potential in increased partnerships and collaboration with the people and communities who are most directly impacted by the lack of community capital. The key findings are laid out below.
This paper is intended to help elaborate an approach to community investing by universities that prioritizes the voices of students and community members. Research was conducted between June and November 2012, utilizing case studies selected by the Responsible Endowments Coalition (REC) and The Democracy Collaborative. The case studies were chosen in accordance with a range of criteria, including REC’s reach and existing networks of student contacts, geographical considerations, the interests of partner institutions, and a desire to avoid duplicating existing studies.
The research team collected information through interviews with students, faculty, administrators, community groups and outside experts from eleven universities and their surrounding communities. A list of interviewees and contributors can be found in the Appendix at the end of the paper. Collectively, the balance of interviews ended up being skewed towards students due, in part, to a lack of response by some administrators to interview requests. It is our hope that the paper will prove useful to those working with colleges and universities to build healthy and more resilient communities across the country.
To maximize the influence of student campaigns and other activities in increasing the impact of university community investing and moving it to scale, this paper recommends:
- Increasing the participation of alumni in student campaigns, dialogues, and related activities, given the leverage they can exert on their universities
- Adopting more partnerships with community-based organizations, professional associations and organizations focused on university community engagement
- Building student involvement in the activities of higher education networks such as the Anchor Institution Task Force, the Coalition of Urban Serving Universities/Association of Public and Land-Grant Universities (USU/APLU), and Campus Compact to provide greater student input into national-level conversations and identify champions for “win-win” opportunities
- Developing a model financial design for scaling-up sustainable community investing by university endowments, drawing on best practices for community investing
- Establishing better links with service learning and engagement curricula to raise the profile of community investing and give it a human face
- Identifying “game-changing” institutions whose decisions will have the most impact on the endowment field and on peer institutions
- Testing out a more community-oriented strategy involving sustained on-the-ground organizing by student organizations in the community, as well as on campus, and working as part of a broader community coalition through “pilot” campaigns in select cities nationwide
JOE GUINAN is a Senior Fellow at the Democracy Collaborative at the University of Maryland, where he is Co-Director of the Next System Project.
SARAH MCKINLEY is a Research Associate at the Democracy Collaborative.
BENZAMIN YI is a Research Assistant at the Democracy Collaborative.