The New Anchors: Corporate Engagement with Lower-Income Communities in Smaller Cities

57 Pages Posted: 24 Sep 2021

See all articles by Peter Eberhardt

Peter Eberhardt

Initiative for a Competitive Inner City

Howard Wial

Initiative for a Competitive Inner City

Date Written: September 20, 2021

Abstract

Anchor institutions are large or otherwise influential organizations that participate in community engagement activities and have relatively deep roots in (are unlikely to move from) their communities. We explore the motivations and strategies of for-profit corporations’ engagement as anchor institutions with lower-income communities in four smaller cities: Amarillo, TX; Fort Wayne, IN; Richmond, VA; and Syracuse, NY. Using case studies, we present detailed findings about companies’ motivations and strategies in engaging with lower-income communities that are either home to or located near their facilities. We find that:

For-profit companies are often anchored in and engage with a broader geographic area than their nonprofit counterparts.
The perceptions of anchor leadership shape community engagement activities, especially in lower-income communities.
Banks, utilities, and companies that are privately held, larger, or have a headquarters in a region seem to be most engaged with lower-income communities in their regions.
Companies whose CEOs or owners grew up in or have similarly deep ties to lower-income communities are often more engaged with lower-income communities.
Very few of the anchors we interviewed formally track the impacts of their community engagement efforts and neither do their nonprofit, foundation, and government partners.
Creating a pipeline of workers is a common motivation for companies.
Banks, utilities, and some other business-to-consumer companies, such as retail stores, often care about the visibility of the community engagement initiatives that they support more than do other types of companies.
The connection between community prosperity and long-term business success motivates some for-profit anchors to engage with lower-income communities.
Identity is a distinct motivator for many for-profit anchors.
For-profit anchors have different methods of choosing the subjects on which they engage with lower-income communities but usually shape their strategies based on leaders’ or employees’ perceptions about what is important.
Some for-profit anchors leverage their subject-matter expertise to develop community engagement programs.
Some for-profit anchors implement shared value strategies for lower-income community engagement.
Some companies deliberately create new jobs in lower-income neighborhoods and hire local residents to fill them.
For-profit anchors rarely collaborate with other for-profit anchors on community engagement efforts even though they believe that such collaboration would make those efforts more effective.

We suggest ways in which local practitioners and policymakers in government, philanthropic, and nonprofit organizations can encourage more for-profits to engage as anchor institutions with lower-income communities. We also make recommendations for for-profit companies themselves to deepen, expand, or begin initiatives to support lower-income communities.

Keywords: anchor institutions, corporate social responsibility, poverty, shared value

JEL Classification: I39, L20, M14, Z13

Suggested Citation

Eberhardt, Peter and Wial, Howard, The New Anchors: Corporate Engagement with Lower-Income Communities in Smaller Cities (September 20, 2021). Available at SSRN: https://ssrn.com/abstract=3929117 or http://dx.doi.org/10.2139/ssrn.3929117

Peter Eberhardt

Initiative for a Competitive Inner City ( email )

P.O. Box 191297
Boston, MA 02119
United States

Howard Wial (Contact Author)

Initiative for a Competitive Inner City ( email )

P.O. Box 191297
Boston, MA 02119
United States
02119 (Fax)

HOME PAGE: http://www.icic.org

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