For further information: Myra Alperson, (212) 222-2243, [email protected]
For Release Thursday, August 27, 1998 Release #4436A
CORPORATE COMMUNITY ECONOMIC DEVELOPMENT PROGRAMS
NOW WIDESPREAD AND MOVING INTO SUBURBS
Alcoa, Maytag, John Deere Play Major Roles in Their Communities
While corporate community economic development programs are continuing to focus on big cities, a new study from the Conference Board shows that some of the most effective models are now in America's suburban and rural regions.
"Suburban corporate community economic development efforts include projects for such leading companies as John Deere (Moline, IL), Maytag (Newton, IA), and Crayola (Easton, PA)," says Myra Alperson, author of the Conference Board report, Building The Corporate Community Economic Development Team.
Quality-of-life projects with a cultural focus, such as the New Jersey Performing Arts Center in downtown Newark, New Jersey, are important engines to generate jobs, retail development, infrastructure investment, and a positive city image, according to the Conference Board report.
The report also finds that CEO participation and cross-functional partnerships are critical factors in the success of corporate community economic development efforts.
The study covers 119 companies and includes a detailed matrix listing the Best Practices of 17 companies and corporate-community partnerships, including the key success factors for each initiative. More than 80% of these companies have community economic development programs.
BENEFITS OF COMMUNITY ECONOMIC DEVELOPMENT
Communities heavily benefit from corporate economic development projects. Example: The presence of a successful sports arena or cultural center may lead to the creation of new businesses and jobs, new customers, economic spin-off development, and environmental improvements. Examples include John Deere supporting a civic center in Moline, Illinois; Prudential investing in the New Jersey Performing Arts Center, helping bolster Newark's image as an entertainment center (and spurring new opportunities for restaurants and retail development); Maytag's investment in a new community college facility in its headquarters community, which has since drawn other educational institutions seeking to reach a wider market; and Binney & Smith's development of the Crayola Factory in Easton, PA, the company's headquarters, creating a private-public partnership that has revived the downtown area, created jobs, and spurred economic growth.
Although much community economic development comes in the form of cash grants and investments, a significant proportion includes loaned managers from sponsoring companies. This expertise can be crucial in assuring the success of a project or in strengthening the ability of non-profits to serve their communities. John Deere's contribution to the redevelopment of Moline included not just significant cash investments but the long-term loan of a senior manager with real estate expertise to head the local community development alliance.
Other models of community economic development mentioned in the report include the New York City Investment Fund, which pools grants from several dozen private, corporate, and foundation investors to support business development in disadvantaged neighborhoods. The donors occasionally also become involved in a more hands-on way, since they are encouraged to review applications closely and then provide their own expertise to help grantees make the best use of the grant and to attain their goals.
CEOs WITH STRONG TRACK RECORDS
The report notes that the transformation by Alcoa of its downtown Pittsburgh headquarters building to a consortium of community development organizations was CEO Paul O'Neill's idea. The strategy was that the sharing of the regional economic development center by several dozen groups would promote more collaboration and result in more effective programs and greater community development opportunities in the future. A new Alcoa headquarters will be built in Pittsburgh. According to the Conference Board report, these efforts will benefit not only the greater Pittsburgh area, but the business environment in general.
Maytag's successful and swift conversion of an old warehouse into a new and much- needed community college facility in its headquarters community of Newton, Iowa, was led by CEO Leonard Hadley.
The transformation of Moline, Illinois from a troubled Rust Belt community of old and abandoned factories into a bustling downtown combining new tourism opportunities, public parkland, commercial development and an award-winning arena and civic center, is due largely to the commitment of former John Deere CEO Robert A. Hanson, who started the project, and current CEO Hans W. Becherer.
THE BOOM IN PARTNERSHIPS
An increasing number of corporations are building community economic development teams, ( m o r e )
- 3 - according to the study.
"Through partnerships, companies seeking to undertake community economic development can leverage limited resources to yield greater impact on communities and companies," says Alperson.
"These partnerships are involved in a range of activities, including education and training, culture and sports, housing, economic revitalization, and small business support and job creation."
Approaches to community economic development reported by more than 75% of survey participants include public-private partnerships, which link companies and government to support educational programs, housing, and a range of other community development initiatives; purchasing programs that budget for a percentage of the company's goods and services to be bought from companies owned by minorities or women; and community partnerships with local nonprofit organizations.
A FORD FOUNDATION INITIATIVE
The Conference Board's study of community economic development was made possible with support by The Ford Foundation, which is funding research at a number of organizations to explore and advocate the business case for community economic development and to identify "best practices" in the field.
In addition to its management research, The Conference Board brought together senior managers from major companies with key non-profit leaders engaged in community economic development efforts in New York City to examine "best practices" in the field.
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Source: Building the Corporate Community Economic Development Team Report #1205-97-RR The Conference Board
Information on ordering this publication can be obtained by calling The Conference Board Customer Service Department at (212) 339-0345. Media, please call (212) 339-0231.
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