The Presidents' Council on Impact Investing, which includes twenty foundation leaders, is calling for greater involvement of local residents in the deployment of investments in Opportunity Zones.
Established by the Tax Cuts and Jobs Act of 2017, Opportunity Zones are an economic development tool created with the aim of incentivizing the investment of private capital to address unmet needs in low-income communities; in return for their investment capital, private investors receive various tax benefits. In a letter, the foundation presidents warn that absent a guarantee that capital will flow to the neighborhoods or projects most likely to benefit those who work and live there, many Opportunity Zones will lose out, even as those in gentrifying parts of New York City and Washington, D.C., continue to draw the lion's share of development capital while leaving longtime residents vulnerable to displacement.
"We know that there is tremendous potential if we invest in the human and social capital that already exists inside these communities," the letter states. "And we also know that success will require clear opportunities for community engagement to ensure local context and priorities are front-and-center in every Opportunity Zone. Indeed, success hinges on the extent to which Opportunity Zones enable current residents to engage and equitably participate in defining how new investments ultimately reshape and strengthen the physical, social, and economic fabric of their communities."
To ensure that Opportunity Zone residents are equitably involved in the effort, the foundation presidents call on policy makers at the federal, state, and local levels to leverage incentives and regulations in order to protect the voices and advance the priorities of residents; on investors and fund managers to promote authentic community engagement in order to determine investment priorities, respond to residents' needs, and shape a shared vision for equitable development; and on impact investors and grantmakers to stand committed to collectively championing residents' voices and holding market actors accountable for the outcomes of their investments.
Convened by the U.S. Impact Investing Alliance, the council's members include the leaders of the Annie E. Casey, Case, Packard, Ford, Heron, MacArthur, Kresge, Lumina, McKnight, Nathan Cummings, Open Society, Rockefeller, Sorenson Impact, Surdna, and W.K. Kellogg foundations; the Meyer Memorial Trust; and the Rockefeller Brothers Fund.
"As the rest of the country has enjoyed a decade of robust economic growth following the financial crisis, these distressed communities have slipped further and further behind," the foundation presidents write. "Bridging that growing divide and fulfilling the promise of Opportunity Zones for the people living and working inside them today must be the subject of our shared focus and drive."