Creating a more collaborative and inclusive economy starts with grassroots work nationwide to help socially and economically disadvantaged individuals (SEDIs).
It also requires long-term support from the business world at large.
That means leaders at corporations, non-profits, states, and municipalities must work alongside one another to make the desired societal impact in their communities.
That was a common theme of a recent Aspen Institute event hosted at High Alpha Innovation headquarters in Indianapolis.
Leaders in academia, impact investing, government, and non-profits spoke at the event about how organizations can help provide access to professional development and growth programs in underserved and underrepresented communities.
Empowering low-income communities with data-driven innovation and training
“Compassion means setting skills.”
This opening insight from Stephen Goldsmith, Derek Bok Professor of the Practice of Urban Policy and Director of Data-Smart City Solutions at the Bloomberg Center for Cities at Harvard University, summed up the initial panel discussion’s premise:
That enabling those in disadvantaged areas to gain new skills and knowledge can provide both them and employers with value
The issue is access. Consider education.
“Our neighbors face a little bit of an uphill battle sometimes, especially in the education realm,” Kolton Williford, Chief Development Officer for the Indianapolis-based Shepherd Community Center, shared in the session. “We think a lot about, ‘How can we come alongside our neighbors in the community to help provide access to those educational pieces?’”
Kate Coleman, IAS Advising LLC Principal and Founder and University of Chicago Leadership & Society Initiative Advisor, noted a lack of college degrees prevents those with less education from realizing their desired career progress and earning a livable wage.
“Getting someone into the system and creating the conditions whereby they can effectively participate and complete a two- or four-year degree is highly problematic,” said Kate.
That’s where skills-based training can help.
Kate highlighted a Baltimore-based group that teaches executive functions to traumatized youth. Once those in the initiative improve their concentration skills, they’re entered into skills-based training courses to learn new trades and gain expertise that can help them get jobs.
It’s this type of “learning on the go” that not only enables disadvantaged youth to gain skills to thrive in the “shifting digital environment” but also those with degrees as well, according to panelist Welby Leaman, Senior Director of Global Policy Strategy at Walmart.
“If you think your four- or six-year degree can stand up to all the uncertainties around digital transformation, good luck,” Welby noted.
Providing paths to economic prosperity in ‘underestimated’ communities
Aside from offering skills-based training, a separate event panel noted there is a sizable opportunity to invest in “underestimated” communities that positively impacts SEDIs and provides strong returns for investors.
“I don’t know that there is inherent risk that is larger than any other [investment] risk because we’re talking about these communities,” said Salah Goss, Senior Vice President at the Mastercard Center for Inclusive Growth.
Salah added that private capital and public funds allocated to economic development programs in underserved areas “historically and empirically” lead to strong ROI for investors.
“Innovation is deep in these communities,” Salah continued. “If we partner with people who are approximate to not only the problem but also the solution, I actually think it’s a good bet.”
Salah detailed her time working at the Source Foundation in Senegal. She had a budget of $10 million from 400 grants to use across 16 African countries, and was able to meet with locals to see the problems they faced first-hand.
In her time at the Gates Foundation, Salah noted her budget rose to $90 million. However, she had to disperse funds to intermediaries. She was “further from the communities that [we were] helping,” which, to her, led to more risk.
This experience made Salah realize investors’ risk perception must shift.
Addressing three investor-centric challenges — translation (a perceived lack of corporate knowledge of leaders in underestimated communities), measurement (not knowing what success looks like), and incentivization (quantifying impact to investment leadership) — could ultimately lead them to back more projects geared toward SEDIs, Salah noted.
“How do we make sure we talk about [investment] in a way where we center the intelligence, the experiential genius of being proximate to what’s needed, rather than the risk because it looks a little different?” Salah posed to event attendees.
Supporting vulnerable populations as a collective business community
“I think the business community has a competitive advantage in terms of bringing innovations to the marketplace quicker than probably other institutions do,” Ivan Barron, PhD, Executive Director of PREA Foundation, stated in his opening remarks of a session on corporations’ collective role in supporting vulnerable populations.
However, Ivan added it’s not simply about bringing innovative ideas to life in the form of new companies. It’s about testing new innovations over time to determine which models are worth scaling by assessing their likely societal and economic impact.
The ability to test ideas at scale requires buy-in from corporate. And that requires data-backed arguments, Jennifer Hankins, Managing Director at Tulsa Innovation Labs noted.
“When you don’t have a super-engaged corporate base, how do you engage them”? Jennifer asked. “How do you start to bring them in? And — when we’re talking about innovation, startup creation, and entrepreneurship — how do we solve a problem they care about?”
Explaining the social and revenue impact of incubating new startups and providing capital for other external venture-building opportunities allows scaled organizations Jennifer and her firm work with to see themselves as part of the solution.
This approach also helped another panelist, FVLCRUM Funds Partner and Co-founder Ben Carson, Jr., bring enterprise solutions and economic development opportunities to SEDIs.
Ben shared how one particular FVLCRUM acquisition allowed the firm to create collaborative programs with local foundations that aided workforce development for unskilled labor and at-risk populations in low- and moderate-income (LMI) communities in 170 cities nationwide.
This work created 4,000 jobs for individuals in LMIs and strong returns for limited partners.
High Alpha Innovation aims to do something similar with one of our upcoming startups, which intends to solve meaningful problems like this around workforce empowerment.
The ability to show robust ROI from portfolio companies and community initiatives like this are critical proof points to persuade potential LPs to back funds’ businesses, Ivan noted.
“I think we need to all get better about showing the numbers, the dollars,” said Ivan. He added how this transparency “makes investors, particularly from the business sector, pay attention.”
