Community Wealth Building Initiative

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businesses will provide wealth-building jobs in low-income communities in the Washington ... partnered with Next Street,
Community Wealth Building Initiative Frequently Asked Questions

1.

What is the Community Wealth Building Initiative?

The Community Wealth Building Initiative (CWBI) is a collaborative effort among local anchor institutions (universities, hospitals, and local governments) to launch and support green employee-owned businesses serving anchor needs. The Community Foundation for the National Capital Region (The Community Foundation) in partnership with The Washington Regional Association of Grantmakers (WRAG) is sponsoring the initial efforts, which follow a feasibility study of this approach, inspired by the Mondragon Corporation in Spain and incorporating lessons learned from Cleveland’s Evergreen Cooperative model. The employee-owned businesses will provide wealth-building jobs in low-income communities in the Washington metropolitan region and forge strong connections with local anchors to secure long-term contracts for sustainability. 2.

Who is part of this collaborative effort?

Several local funders organized through WRAG and The Community Foundation engaged City First Enterprises (CFE) to lead the planning and implementation phase of the CWBI. CFE has partnered with Next Street, an urban merchant bank and business strategy firm, to ensure that stringent analysis of possible business lines accompanies the collaborative anchor engagement. Further, The Democracy Collaborative of the University of Maryland -instrumental in the Cleveland effort -- provides ongoing guidance to the CWBI.

3.

Who is City First Enterprises?

City First Enterprises (CFE) is a nonprofit incubator of large-scale community development solutions in the Washington metropolitan area. With a mission to expand opportunity for lowand moderate-income families and strengthen underserved communities through economic justice, over the past 20 years CFE has developed and launched several innovative organizations such as City First Bank of DC -- lending millions of dollars to underserved neighborhoods -- and City First Homes -- supporting permanently affordable homes for working families.

4.

What are “anchor institutions”?

Anchor institutions are local, place-based institutions such as universities, hospitals and local governments that are rooted in a particular location, require a large workforce, have significant, ongoing procurement needs and budgets, and maintain an abiding interest in the long-term vitality of their surrounding neighborhoods and community.

5.

What is an “anchor strategy”?

An anchor strategy seeks to engage major anchor institutions to improve their wider community by steering their activities toward greater positive impact. For example, it helps anchors procure more goods and services from local vendors that offer wealth-building jobs or connects anchors to local businesses offering more sustainable goods and services.

6.

What are the initial business lines?

After extensive anchor interviews and rigorous business selection criteria that included sustainable profitability, significant job creation and anchor engagement, the planned CWBI business lines are: a green stormwater management company and an industrial scale urban greenhouse. 7.

What is the Green Stormwater Management business?

The green stormwater management business will offer maintenance, monitoring, and inspection services to anchor institutions responsible for green stormwater management installations. Stormwater management is critical to protecting the Chesapeake Bay Watershed. With federal and state laws requiring stringent controls of stormwater runoff in the region, many municipalities are investing heavily to retrofit their typically “gray” stormwater management systems with greener technologies and systems, such as swales, rain gardens, permeable pavements, gravel filters, green roofs and similar devices. The green stormwater management business will service the major expansion of these devices in the region.

8.

What is the Industrial-Scale Urban Greenhouse?

The urban greenhouse will be a newly formed, employee-owned business that will initially operate a one-acre greenhouse and processing facility in Washington, DC, supplying fresh, local produce to universities, hospitals, businesses, governments and local residents. The business will use hydroponics (specifically a nutrient-film growing technique) to offer its anchor customers and their food service providers year-round access to a variety of fresh, locally grown lettuces.

9.

Why “employee-ownership” companies?

Employees who also co-own their company have not only a job, but also a way to build wealth for their families. Employee ownership involves commitment to and participation in the longterm success of the business. It means career growth and shared incentives to excel. It has been successful in different models around the world.

10.

If a company is employee-owned, do the employees control it?

Employee owners need at least two things to ensure democratic control of a company: 1) voting rights – significant business decisions are voted on by the employees, and 2) participation – all employees receive basic information about company progress, and have the opportunity to participate in day-to-day operations. 11.

Who will benefit from the jobs created through CWBI?

Most of the CWBI employee-owners will come from the low- and moderate-income neighborhoods where the companies are to be located. The businesses are designed to be appropriate for potential employee-owners facing challenges as unemployed or underemployed residents or returning citizens. Working directly with workforce development and community partners, the CWBI will help develop skills, enhance workforce readiness, and ensure the hiring, training and retaining of such local employee-owners. The wealth-building jobs and employeeowned companies will help redirect capital into low-income neighborhoods, generating muchneeded ladders into more economic security.

12.

Why is there a nonprofit holding company for the CWBI operating companies?

The employee-owned operating businesses launched by CWBI will be supported by a nonprofit holding company (HoldCo). This allows the operating businesses to concentrate on excelling in their specific lines of work, while HoldCo will nurture relationships with anchor institutions, philanthropies, investors, and existing businesses, operate a strong employee onboarding program with a workforce development partner, provide wrap-around services to support the employee-owners, and provide back-office support services such as human resources, legal, marketing, accounting, information technology, and the like. The HoldCo will take on many of the unique challenges of creating a network of successful employee-owned operating companies that embody the proven approach of building community well being by generating good jobs, keeping capital local, promoting household wealth, and enhancing anchor institutions.

13.

Is there a minimum financial level to be engaged with the CWBI?

No. City First Enterprises projects the cost of the first three years of operating support at $2.4M. It is anticipated that philanthropy will need to support $1.8M of that cost. To date, over $650,000 has been raised or pledged by 10 funders. Grants have ranged from a few thousand to several hundred thousand dollars. Our goal is to build a cadre of philosophically and financially supportive grantmakers ready to partner with the government, nonprofit and business sectors to make the creation of green, wealth-building employee-owned businesses a reality.

14.

Who should I contact for additional information or to become more involved?

If you would like additional information or would like to determine how your organization can get more involved with the CWBI, please contact Jason Washington, Senior Vice President at City First Enterprises, at [email protected], or 202-745-4480.