Neighborhood Trusts

Local Return supports the recommendation made by the Rhode Island Foundation’s Make It Happen: Investing in Rhode Island’s Future committee to invest $50 million of American Rescue Plan Act funds in neighborhood trusts.

A neighborhood trust is a collection of funds, controlled by members of the community for the long-term benefit of the community. This is a way of getting funds directly to neighborhoods that have been hardest hit by both COVID-19 and generations of financial disinvestment — and generating economic activity, local agency, social resilience, and community wealth.

$50 million could seed nine neighborhood trusts, along with robust technical assistance for the first five years and legal support upon start-up. View the slideshow above for more details on our proposal.

Do you believe in this proposal like we do? Contact your state Representative and Senator now. Tell them:

  • The unequal impact of COVID-19 on neighborhoods stems from decades of disinvestment, racism, and systemic failures.
  • Neighborhood trusts center community decision-making, giving distressed communities local ownership and control of the resources that flow into them. People know their own needs and those of their communities best.
  • I support the proposal to use $50 million of ARPA funds (less than 5% of the Federal Relief Funds allocated to Rhode Island) for neighborhood trusts.
  • This idea has the potential to be truly transformative, and those are the kinds of investments we need to be making right now for Rhode Island’s long-term future.

Why buy local?

Every $1 you spend has consequences. If you choose to buy from locally-owned businesses, your money does more good for your local community. We can give you at least six good reasons to buy local:

  1. Money: When we shop local, money stays in our local economy longer and does more good. For every $100 you spend at a locally-owned business, an average of $68 stays in the local community. Compare that to just $43 for a big box store.
  2. Jobs: Local businesses = local jobs. Small businesses are the state’s largest employer. They hire our neighbors, family members, and friends.
  3. Charm: Local businesses shape the character of our communities. They make our places unique and interesting.
  4. Climate: Buying local is good for the environment. It means less resources and energy were used to transport goods.
  5. Community: Local businesses are more inclined to give back to the local community — think Little League teams, raffle donations, and charitable giving — because they are part of the local community. They donate almost 2.5x more per employee than national chains.
  6. Trust: It feels good to do business with someone you know.

With every purchase you make, you can strengthen the Rhode Island economy.

A $2.6 billion downpayment

How Rhode Island could use ARPA money to build community wealth and resilience

Congress passed the $1.9 trillion American Rescue Plan Act (ARPA) to “help turn the tide on the pandemic, address its economic fallout, and lay the foundation for a strong and equitable recovery.”[1] The ARPA consists of over 84 unique programs distributed across 19 federal agencies. Rhode Island will receive more than $2.6 billion through state and local aid and targeted investments.[2] 

This money presents an unprecedented opportunity for our small state. While the allocation processes aren’t very transparent, state and local leaders are making decisions now on how these funds should be allocated. These are momentous decisions with the potential to change lives for years to come. 

In the spirit of laying the foundation for a strong and equitable recovery, Local Return offers the following ten examples of potential community wealth-building investments that could be made on the state or local level using ARPA funds. (These suggestions build upon the eight principles we previously shared.) 

  • Individual Development Accounts: IDAs are savings accounts that help people build assets, achieve financial sustainability, and pursue long-term goals. People can use IDAs for buying a home, starting a business, paying for school, or more. The money contributed to an IDA is matched 1:1 or 2:1, helping individual savings go further.

    For example, the Genesis Center / Pawtucket Credit Union Keys To Success IDA helps people match up to $2,000 in savings for the purchase of a reliable vehicle. 
  • Local Currency Stimulus: Municipalities could give a direct stimulus payment to residents through a local currency vehicle that could be used at locally-owned businesses. This would supercharge the benefits of a “buy local” campaign and keep those stimulus dollars circulating in the local economy, creating a multiplier effect.

    For example, in Rhode Island, Bonus Bucks increase the spending power of shoppers using Supplemental Nutrition Assistance Program (SNAP) benefits at farmers markets by providing a 100% match on grocery purchases to spend on fresh fruits and vegetables. Tenino, Washington launched a local currency early during the pandemic. The city of Boston is working with Colu on the B-Local App, which provides rewards for shopping locally.  
  • Local Economy Preservation Fund: The impact of the pandemic on local businesses is still playing out. Businesses may continue to close, or out of state corporations or investors could scoop up struggling businesses. Preserving these local assets and jobs is critical. 

    For example, the Democracy Collaborative and Council for Development Finance Agencies have developed a public funding model called a Local Economy Preservation Fund, which would make equity investments in local companies that were viable pre-COVID and will be viable afterward, place them in a holding company, and provide an exit to community ownership in the recovery. LEPFs would emphasize ownership by people of color, employee ownership, or local ownership that stays local.
  • Exit to Employee and Cooperative Ownership: With our aging population, Rhode Island is facing a silver tsunami. In the coming years, small business owners will be retiring without clear succession plans, particularly in key industries like manufacturing. Employee ownership is a sound model for succession planning. Worker-owned cooperatives have been proven to reduce inequalities in the economic system. Dedicated funding, outreach, and technical assistance should be dedicated to business owners interested in exiting to local, shared ownership. 

    For example, the Ohio Employee Ownership Center at Kent State University provides technical assistance, training, and outreach to business owners looking to exit their business and sell to their employees. The Small Business Development Center and Polaris Manufacturing Extension Partnership, both located within the University of Rhode Island, are natural partners to lead such an effort in Rhode Island. 
  • Community Equity Fund: Access to capital is a major barrier to business ownership for entrepreneurs of color and those in low-income communities, who often don’t have friends or family who can invest early, high-risk equity. They are limited by relying more on bootstrapping, debt, and predatory vehicles. A community-based equity fund that focuses on entrepreneurs who don’t have access to traditional financing would fill a strategic gap in our ecosystem and allow these business owners to start or grow their businesses.

    For example, the Eagle Market Streets Corporation in Asheville, North Carolina, is creating the Community Equity Fund, an innovative opportunity for small person-of-color-owned businesses experiencing barriers to traditional operating capital that offers non-traditional operating capital. 
  • Community Property Ownership: Real estate ownership is a key wealth creation strategy, but it requires money. The “post-COVID19 land grab”[3] has begun, and we know that  speculative property owners can dramatically change the character of communities. There are promising models (such as cooperatives, community land trusts, and real estate investment trusts) that allow small dollar investors to pool their resources to purchase, hold, and develop land or buildings for commercial or residential use. This collective buying power can help preserve local ownership and long-term affordability in places that are ripe for speculation. One particular area of focus should be on innovative, low-risk commercial spaces to support inclusive economic development. While it might take time to establish community ownership structures, governments could purchase and land bank key properties.

    For example, the Sawmill Community Land Trust in Albuquerque, New Mexico, develops retail, commercial, and light industrial spaces that benefit the community with job creation and needed services.
  • Social Infrastructure Grants: Communities that have experienced disproportionate impact from COVID should look inward to the assets (e.g. land, environment, industries, community partners) that exist within their places. Available funds could help provide grants to block clubs, neighborhood associations, and nonprofit organizations to improve vacant or neglected properties and put them to use for community gardens, farms, or pop-up shops.

    For example, in Montreal, a partnership between the city and Regroupement des Éco-quartiers helps residents transform neglected alleyways into ruelles vertes, beautiful spaces for community. 
  • Home Repair Grants and Loans: Aging and low-income homeowners may struggle to keep up with necessary home repairs, leaving them vulnerable to housing instability and loss of assets, and meaning their homes become susceptible to investors who want to flip the properties. State and local programs could make no-interest loans or grant funds available for home repair to preserve naturally occurring affordable housing and local ownership.

    For example, we could extend the economic benefit to Rhode Island by linking homeowners in need of services with graduates of the Building Futures construction pre-apprenticeship program and similar efforts.   
  • Support for Business Districts and Commercial Corridors: Let’s look beyond individual businesses to their environments. We saw tremendous ingenuity by businesses, neighborhoods, downtowns, commercial districts, village squares, and towns in taking community and business outside during the pandemic. Now is the chance to deepen and sustain some of those changes. Funds could be used to reactivate vacant spaces for community or business use, market businesses within a district, make physical improvements to the outdoor infrastructure, host special events, activate alleys, pursue economies of scale, establish business improvement districts, or better link commercial spaces. To be clear, funding is needed for ongoing programming and maintenance, as much or even more than capital improvements.

    For example, Rhode Island could reinvigorate and grow the Main Street Streetscape Improvement Funds from 2016-2018. 
  • Wireless networks in low-income QCTs: With work, school, government, and healthcare going remote, COVID proved that reliable, quality internet is crucial community infrastructure. Funds can be used to improve access to affordable networks.

    For example, ONE Neighborhood Builders created ONE|NB Connects: Community WiFi, a mesh WiFi network that covers 5 million square feet of Olneyville (about half the neighborhood and roughly two-thirds of all neighborhood residents).

These are just ten examples of specific investments that could keep federal recovery dollars circulating longer and multiplying more in Rhode Island, leading to deeper and broader benefits for Rhode Islanders. We strongly urge state and local officials to prioritize investments like these that address long-standing wealth gaps. Wealth matters because it leads to resilience, one’s ability to withstand challenges, persist, and adapt. While COVID did not discriminate, wealthier households had more options to stay safe and recover. 

One last note: Investments should be strategically woven together and targeted to (and, importantly, implemented in partnership with) the most historically marginalized communities. Not surprisingly, the communities hardest hit by COVID are also those which have the largest and most long-standing disparities in health, economic, and social outcomes. We should follow Treasury’s lead and start with the 52 Qualified Census Tracts in Rhode Island.[4]  

Investing $2.6 billion wisely, where it can have deep and long-lasting benefit, is a tremendous opportunity and a formidable challenge. We offer these ideas to provoke creative thinking and productive dialogue, and we would be pleased to help moving forward. 


Footnotes:

[1] Treasury.gov

[2] Economic Progress Institute of Rhode Island

[3] Phrase borrowed from Nikishka Iyengar and John Haines, Next City op-ed

[4] Qualified Census Tracts must have 50 percent of households with incomes below 60 percent of the Area Median Gross Income or have a poverty rate of at least 25 percent. According to HUD, Rhode Island has 52 QCTs.

Community Investment SWOT for RI

Picture of SWOT analysis
Strengths, Weaknesses, Opportunities, Threats for RI’s Community Investment Ecosystem
(click to zoom in)

It takes an ecosystem to build community wealth. No person or place exists in static isolation, so we need to understand the connections and dependencies between entrepreneurs, investors, support resources, policies, funding streams, and the broader environment.

Participants in the Local Investment 101 Workshops worked together to develop a SWOT analysis of our community investment ecosystem. This gives a pretty good overview of where we’re starting — and what we have to tackle to build wealth, resilience, and equity in Rhode Island.

What do you think? Let us know.

What is community wealth?

Local Return exists to build community wealth. So what is community wealth, and why does it matter? 

A community’s wealth comes from the assets that it collectively owns or controls, and which the community uses to care for its place and one another. Community wealth is not just about monetary value that exists or is generated in a place. It involves: 

  • Multiple forms of capital — financial, yes, but also social, intellectual, natural, cultural, built, and political. 
  • Local ownership of these capitals, so that control and benefits remain in the place.    
  • Shared ownership, so assets are stewarded by and for the community and not just a few members.

Community wealth matters because it leads to community resilience (in the same way that personal wealth leads to personal resilience), a place’s ability to withstand challenges and persist, adapt, and transform itself.

So how do we increase a community’s wealth? We like this definition of community wealth building from Marjorie Kelly of the Democracy Collaborative: creating and using local assets to make a community more vibrant, developing assets in such a way that the wealth stays local, and helping families and communities control their own economic destiny.

Community Conversation with Karen Figueroa and Pam Jennings

“It’s giving people real power over the money and decisions that impact their community under the assumption that it’s the people that use those spaces and are walking the streets and in the schools every day that…have a pretty good knowledge of what changes and what things they would like to see happen.”

This, says Pam Jennings, is participatory budgeting

Last year, Pam and Central Falls City Council President Jessica Vega taught a semester-long elective class at Central Falls High School on participatory budgeting, with an actual budget of $10,000 available to spend. Karen Figueroa, then a junior, enrolled in the class and served on the project’s steering committee. “I thought that it was really cool how students could be able to change something in the school,” she said. 

Students submitted their ideas — about 300 of them — and the class organized them into similar themes. Committees within each theme worked together to develop plans for how the $10,000 could be used. Then the students voted, using real voting machines, on ballots printed in three languages. The winning idea? Improving the school’s bathrooms. “We finally have real mirrors,” said Karen, who will be studying political science at Salve Regina University next year. “And we also finally have soap and enough paper towels and toilet paper in the bathrooms. Most of the time, we didn’t have any of that.”

People know best what they and their communities need, and decisions for how resources are allocated should be made as close to the ground as possible. This fundamental principle applies to all community investments, and we hope our leaders will keep it in mind as millions of federal recovery dollars flow into the state.

Follow along with Central Falls Warriors for Change.

Community Conversation with Shannon Brawley & Shayna Cohen

“The biggest issue facing our industry is the lack of individuals coming into the industry,” Rhode Island Nursery & Landscape Association Executive Director Shannon Brawley told our board member Sue AnderBois. “And we have such an increasing demand for our services, for our products, as we navigate climate change, as we navigate issues around food security, (and) protecting our farmland. All of these things are tied to our industry.” 

So over the past few years, RINLA developed Growing Futures, a suite of career programs to connect people, companies, and training in the $2.5 billion plant-based industry. Growing Futures includes the first-in-the-country multi-employer registered apprenticeship program in the field. And part of the program included a partnership with the state’s Department of Environmental Management, which estimates that over eight weeks, Growing Futures participants contributed to a labor savings of over $100,000, reflecting 5,000 labor hours, and helped clear 18 miles of public lands.

And the reaction from both employers and job seekers was rewarding. “We got almost these love letters from people,” said Shayna Cohen, senior consultant with Karen Karp & Partners, who helped develop the programs. “We were bringing people in, showing them potential, finding where their passion was, linking it to what we had to offer, and putting them in front of employers.”

Thank you, Shannon and Shayna, for developing systematic ways to connect prepared workers with meaningful jobs that offer living wages in an industry at the forefront of some of our most pressing challenges. 

Community Conversation with Diane Lynch and Nessa Richman

Building wealth and resilience requires a true ecosystem approach. Beyond individual programs or entities, we must understand how factors and players interact with one another. 

Local Return director Josh Daly sat down with two experts at systems-level work. Nessa Richman is network director and Diane Lynch is chair of the Rhode Island Food Policy Council, which for ten years has been bringing people together to create a more just and resilient food system. As Nessa said, “When wealth is owned by too few people within a society, then you have injustices that you really can’t resolve unless there’s a more equal distribution of resources and a more equal distribution of power in decision making.” 

The Rhode Island Food Policy Council focuses on the food system from three perspectives: environmental sustainability, economic vitality, and equity and accessibility. “Over decades, municipal and state level planning, environmental management, regulatory (entities), they’ve not risen to a level of real sophistication or expertise to meet the needs of their communities,” said Diane, getting to the heart of one of the biggest barriers to community wealth-building. “And so you find that the meta network above us is often really difficult to deal with. It is not up to the task at all.”

Not surprisingly, Diane and Nessa had some concrete ideas for investments and improvements. Nessa pointed to the Local Agriculture and Seafood Act (LASA) grant program as a success story. “I would want to see a lot more small grants flowing into our farm, fish, and food businesses to help them take their next steps toward economic viability, toward growth, toward even just getting established in the first place.” 

Listen in to learn more about the network and community wealth building work of the Rhode Island Food Policy Council.

Community Conversation with Chloe Chassaing

Cooperative fans and caffeine aficionados rejoiced when White Electric Coffee at 711 Westminster Street reopened in May. Over the past year, a group of former employees from Providence’s beloved coffee shop formed the worker-owned CUPS Cooperative and purchased the business from the former owner. 

Worker-owner Chloe Chassaing joined Local Return directors Raul Figueroa and Josh Daly to talk about the transition. While customers probably won’t see much of a change, Chloe said, “Internally it does feel differently, because we all have a stake, have a voice, have shared decision making power and responsibilities. We’re all just personally more invested, and it feels really good. It feels like we’re modeling on a small scale some of the things we’d like to see in society.”

The group looked to a cooperative structure because they’re known to be more resilient while also offering better wages and greater dignity. And there’s an added bonus for customers: you can know that the workers you encounter are receiving living wages. “All the people you see behind the counter there working are all the co-owners,” noted Chloe, “and they’re all the ones making the decisions, and they’re all the ones benefiting from your purchase of that bagel with cream cheese and avocado.” 

Worker-owned cooperatives are still new to Rhode Island, so there are lots of eyes on CUPS. Chloe credited a number of local organizations for helping them get off the ground (shout out, Fuerza Laboral, Rhode Island SBDC, the Center for Employee Ownership, Fortnight, and Urban Greens!), as well as cooperative lenders like the Cooperative Fund of New England and the Fund for Jobs Worth Owning, and national resources like the U.S. Federation of Worker Cooperatives.

So visit White Electric Coffee to enjoy a great cup of coffee and delicious locally-made pastry and support one of Rhode Island’s first worker-owned cooperatives.