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Celebrating Catholic Charities’ success fighting poverty in Dallas-Fort Worth; Learning from evidence-based Pilot Projects

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By: AIF Staff

Last week at the University of Notre Dame, Speaker Paul Ryan led a virtual discussion called: Identifying Promising Models: The Padua Project and Reducing Poverty. The conversation focused on the comprehensive model of care deployed by Catholic Charities Fort Worth to help Texas families out of poverty.

Ryan was joined in conversation with Jim Sullivan of the University of Notre Dame, Heather Reynolds with Notre Dame’s Lab for Economic Opportunities, and Cindy Casey of Catholic Charities Fort Worth. Speaker Ryan has enjoyed a long relationship with Catholic Charities, visiting their facilities and talking with participants while serving as Speaker of the House.

Consistent with its mission, the discussion highlighted the American Idea Foundation’s belief that lives can be improved and public policies can be bettered by linking on-the-ground practitioners, researchers, and policymakers.

Video of the discussion is accessible here and some excerpts follow.

Ryan: Padua Project is Putting Innovative Solutions, Partnerships, and Evidence to Work

“The Padua Project is a program run by Catholic Charities [and] uses a case-management model to ending poverty. I’m a big fan of a case management model. Most importantly, they partnered with Notre Dame and the Lab for Economic Opportunities (LEO) to develop a randomized control trial and measure if what they were doing was accomplishing the goals that they set out to accomplish.

“Here’s the result that they achieved: A 25% increase in full time employment, a 64%, increase in housing stability, and a 53% increase in reported improvements in personal health…. And more importantly, because of the way that Catholic Charities partnered with LEO, we know that these are likely the results of this intervention. We know that we can take these results and replicate them, further seeing if we can scale for these interventions and that’s the whole point of all of this….

“What the Padua Project is doing is more than just helping individuals get a job or to improve their housing. They are helping them achieve their God-given potential and when we knit together our individual talents, we build out the common good and we build a more just society.”

Reynolds: The “Why” motivating Catholic Charities’ Padua Project

“From the Catholic Charities side, when I was a part of that team, our “why” was that we wanted to restore the dignity of the human person. Our “why” was that we believe that people deserved a way out of poverty and we believe we were doing too much that was just kind of perpetuating and making life easier for the poverty that people were facing. You know, to be honest, meeting characters where they are at works. Sometimes people have misconceptions of who non-profit folks are and the team at Catholic Charities Fort Worth is probably one of the most incredible smartest compassionate focused teams I think anybody would ever meet. Being a part of that, seeing a team that wanted to make a difference, that wanted to get into this work and sacrificed their own monetary gains to say: “No, you want to care for the least of our brothers and sisters in need and we want to do something big,” that was a real motivator to me….”

Sullivan: The Origins of a Productive Partnership between Notre Dame and Catholic Charities

“When the leadership of Catholic Charities Forth Worth came to us and said: “You want to think big? We want to really try to tackle this problem of individuals who are facing too many barriers that they can’t get themselves out of poverty.” And they told us about this agile program, which didn’t even have a name at the time. And I’ll never forget our first trip down to Catholic Charities… It was really an all-hands on deck session of thinking about how we’re going to design this program…. They have the empathy and the compassion and the understanding of the challenges that these individuals are facing on a day-to-day basis, so [Dr. Bill Evans] and I were really struck by how they were using that information and that experience to design this program. They had the innovative approach of saying: We want to measure this program that we create because we know that the only way it’s going to have a really big impact, the only way it’s going to replicate and scale is if we can prove that it works. And so, they worked with us to build the research design from the very beginning, which made it much easier to collect all the data necessary and measure the outcome demonstrated.”

Reynolds: Personalized Client Support has led to Meaningful Results for Texans in-need

“I will never forget in the early days of the Padua Project when I sat in a meeting between Catholic Charities Fort Worth and LEO and we talked about how people’s spending behaviors had really changed in one year…. The Catholic Charities Fort Worth staff said: “Oh, we know why that’s happening,” and then laid out how, when they first start working with clients, they have the clients write down their values what they value most. Then they have the clients go and start compiling how they spend their money. Then they have the client sit there and look at their values and how they spend their money and see what doesn’t come together. What the Padua Project staff have said is that exercise has made it where the clients have their own “Ah ha” moment, so they own it more. It’s not the patch of a social worker saying: “You really need to quit giving your money away.” It is the parent or a social worker saying let’s look at your values, let’s look at your finances. What do you think could be different? What do you think needs to be the same? And so, just the practices that case managers use, I think is a really strong thing and a thing that, through the qualitative research that Jim is talking about is, I think we can really start replicating.”

Reynolds: Quality Research & Collaborative Partnerships attract Local Support

“A critical piece of having the patience to walk for clients on a journey I think really matters. On the funding side, for I think both LEO and Catholic Charities Fort Worth, it’s a good example of how a partnership between researchers and local social service providers can make both parties more successful at attracting the interest of non-profit funders and government funding. There were several times early on, Bill Evans or myself would go down to Fort Worth and present to non-profit foundations in the Fort Worth community and say: “Hey, you know, here’s the research design we’ve laid out. Here’s what we’re going to measure.” And these foundations were interested in investing in their community and they invested in the Padua Project because they said: Look, this is a serious intervention and they’re going to test it and we’re going to learn about it.

“At the same time, when we work with LEO, it’s not a fee-for-service operation. We don’t charge the nonprofits for the evaluation work. Rather, it’s the quality of the research questions that we’re asking that enables us to get the funding from the federal government or from private foundations. In particular, it’s the structure of the research design. The fact that we were able to implement a randomized control trial and an impact evaluation for a comprehensive case management program, that’s a really hard thing to pull off because it’s hard to find a partner that has the capacity and interest to do that. The fact we’re able to do that, it caught the attention of a large community funder.”

Sullivan: Building on Catholic Charities’ Model & Scaling it Up

“I think a critical piece of the success of scaling up is to be able to continue to demonstrate the programming is right…. It’s critically important when we replicate this program elsewhere that we’re also measuring it and providing the same high-quality evidence that we do [with Catholic Charities Fort Worth]. Now, it’s not going to be possible in all situations to implement RCT’s, but I think a lot of this question is asking: Why is the Padua Project so successful? Is it the fact that Catholic Charities Fort Worth has a great referral network? Is it because of the emergency financial system? I think internally, there’s a lot of conversations between Leo about the mentoring component by the case manager, as that must be playing a really important role. This idea of “trust” in the relationship is critically important, so that is going to be hard to pass through randomized. And so, what we’re doing at LEO — and I think we need to do more, is to incorporate qualitative research into these RCT experiments. What that means is we brought in qualitative researchers who sit down with a client and sit down with the program managers.”

Ryan: Why Successful Poverty-Fighting Interventions make a Difference

“As Speaker, I spent a significant amount of my time working on the social safety net and one of the key things that I learned is that we just don’t have that much evidence on what works and what does not work. When the government doesn’t know what works and when it doesn’t work, we end up failing the people that we are intending to help. Scarce government dollars will go toward programs that are well intended, but that have actually failed to do anything beyond spending scarce taxpayer dollars, and that’s a shame when we create programs that don’t work. It’s not the policymakers or the service providers who suffer, it’s the single mother who needs help. It is the person who’s out of work that needs a job or it’s the young kid who needs security to face the problems of our future….

“With careful research design, we are better able to understand the particular intervention so for example, Padua appears to be most effective at helping those who are out of work, versus those who are needing more hours or higher pay. This understanding of who is most helped can be almost as useful as how you are helping those with different service providers that the Padua model uses.

“It’s important that Padua was successful for its clients, but if we can replicate the work that Catholic Charities was able to do with new organizations, then we can improve outcomes for thousands and thousands of people by understanding the causal nature of adequate information, intervention and choosing….

Sullivan: Bringing Successful Models of Case Management to the Mainstream

“The challenge is that information isn’t made accessible, and it oftentimes gets drowned out by misinformation, right? And so, a big part of what we’re doing at LEO now, and hope to build going forward, is how do we make sure that evidence like the impact of Padua Project doesn’t get buried in an academic journal? Part of what we’re doing is building strong relationships with policymakers on both sides of the aisle and at all levels of government, but I really think, getting back to your point about subsidiarity, the way you get the policy at a national level is to build the evidence at the local level.

“If we can demonstrate that it can work with Catholic Charities, is it because Catholic Charities Fort Worth is so good [or] can we replicate? We can replicate the Padua Project in, you know, a lot of the community providers in Dallas. Then let’s spread it to other cities and let’s apply it in other contexts you know for prisoner re-entry or for refugee services. This comprehensive case management model works as you build the evidence and becomes more and more compelling.”

Ryan: Evidence-Based Policymaking coming to Federal Poverty Fighting:

“[Evidence-Based policymaking is not controversial. It’s not partisan. It was designed to be that way and I think at the end of the day, in the medium term and in the not too distant future, we’re going to be able to see the dollars that the federal government provides local communities for poverty fighting will be dollars that will be directed toward proven methods that have been run through rigorous academic economic models to prove what works. That’s why I really think we’re on the cusp of being much more effective in fighting poverty. All of these dollars that are spent on fighting poverty, it has sort of just been a shotgun approach, a scattershot hoping some of it works. I think we’re going to be able to be much more precise and much more effective and therefore much more impactful.”

Casey: How Padua’s comprehensive care model helps individuals

“Padua has been developed right. We have two-person teams that are assigned to every client who comes into the program. The pieces that have been talking about: the mindset, the work, everything I talked about a few minutes ago about the cognitive development. All of that is coming in with the case manager. We also have a caseworker that kind of helps [the client] identify their resources and then connect to those resources and plan around that. So, it was set from the very beginning to be fast and funded for the extended time with the client and that long-term model that Heather said before of three to five years, that makes the program really where they are for the long haul.”

Ryan: Taking Lessons Learned from Case Management Research, Applying Them to Opportunity Zones

“I also worked at making sure that Opportunity Zone legislation made it through in the law and at the American idea Foundation, where we do a lot of work on Opportunity Zones, we’re also working on trying to make sure that after Opportunity Zones are well-deployed, meet their [communities’] needs. Erie, Pennsylvania, for example, is what I think is one of the more successful Opportunities Zones and what we at the American Idea Foundation are trying to do is encourage through measurements and through other means, Opportunity Zone funds to get moving on this front.

“What I mean when I say that is there are billions of dollars now that are being tapped to invest in a quarter of the poorest census tracts in America right now. This investment is going to provide development to build housing, factories, and retail, all of these sorts of things. What we’re trying to do is encourage these opportunity funds to also partner with local charities.

“These are private sector investors, who are investing in these communities, and I believe that [their] being made aware of the kind of rigorous, scientific evaluations that RCTs and LEO [are doing] with programs like Padua, and [that they] have already done, there’s sort of a ready-made plug and play approach to be taken in these Opportunity Zones where while they’re deploying their capital on a bigger project. There are also incentives to deploy capital to programs like non-profits who are doing case management to help provide the workforce that they’re going to need for the investment they’re deploying in this Opportunity Zone…. And where we see the successful models like Erie, it is private capital, local governments, foundations and charities, all working together in the census tract with all of this money that’s coming in and deploying an all-hands-on-deck strategy to revitalize, to help the people in the area, and take advantage of the new investment and the job opportunities that are occurring there. So, I think this model is really well-timed. I think this model is something that can be deployed over the next handful of years in these Opportunities Zones.”

Speaker Ryan & Rep. Terri Sewell discuss why legislators are committed to making Opportunity Zones Work

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By: AIF Staff

Last week, former Speaker of the House and American Idea Foundation President Paul Ryan moderated a conversation with elected officials, on-the-ground community leaders, and researchers about the development of Opportunity Zones. Opportunity Zones, which were part of the Tax Cuts and Jobs Act of 2017, are a poverty-fighting tool designed to stimulate investment and development in economically disadvantaged areas across the country through the use of tax incentives. 

The virtual discussion provided an update on the progress being made and the challenges being faced by policymakers and community leaders as Opportunity Zones have started to germinate. Consistent with the American Idea Foundation’s mission, the panel showcased how Speaker Ryan is serving as a connector between policy makers, policy and analytical experts, and on-the-ground leaders. Joining Speaker Ryan in conversation were: 

  • Congresswoman Terri Sewell of Alabama, who is working to improve Opportunity Zones on Capitol Hill, ensuring they meet their mission of revitalizing communities. 
  • John Persinger, CEO of the Erie Downtown Development Corporation who is currently spearheading the development of a promising Opportunity Zone in Erie, Pennsylvania.
  • John Lettieri, President and CEO of the Economic Innovation Group (EIG), who is adding intellectual analysis and key perspectives on the best practices for those involved with Opportunity Zones.
  • Patrick McKenna of Catalyst Opportunity Funds, who provides analyses for investors so they can maximize the benefit for both businesses and communities in Opportunity Zones. 

The Foundation has included excerpts of all of the panelist’s contributions (Lettieri and McKenna, and Persinger), and included below are some highlights from Congressman Terri Sewell. 

Video of the Virtual Panel is accessible here.

In introducing the panel, Speaker Ryan summarized the potential that legislators see for Opportunity Zones as a tool revitalize communities: 

“Opportunity Zones hold the promise of being one of the most effective anti-poverty tools the government has designed in a long time. However, they also contain the risk of being yet another disappointing example of misaligned government incentives. The short-term results are promising, if mixed, but if Opportunity Zones are to fulfill their long-term promise, then governments at all levels must work together with the private sector to ensure that Opportunity Zones are meeting their goals.”

In an exchange with Rep. Sewell, Speaker Ryan noted the synergy required for this policy to meet its mission and how efforts are ongoing from Capitol Hill to the over 8,000 Opportunity Zones around the country: 

“First and foremost, one of the unfortunate byproducts of using reconciliation for the Tax Cuts and Jobs Act was the fact that many of the reporting and transparency requirements were ‘Byrded’ out. Congresswoman Sewell has been leading on this by authoring bipartisan legislation that would improve transparency in these projects.

“Second, funds need to ensure that their incentives align with the goals of Opportunity Zones. That means putting in ‘opportunity targets’ that their projects should meet, along with the private sector returns for their investors. Finally, state and local governments need to make sure they are appropriately identifying areas where projects can make a difference.”

Detailing how her Alabama Congressional district has come together and embraced the concept of strengthening and improving communities using the benefits of Opportunity Zones, Democratic Congresswoman Sewell touched on why she became involved in this policy effort.

“I am a big believer of using everything in the toolkit that you have in terms of trying to figure out ways that we can huddle together with some public financing and with private financing that will actually endure to having better communities and revitalizing those communities. When I got to the Ways and Means Committee and we were working on the 2017 tax bill, while there were many provisions that I didn’t support, I really kind of honed-in on Opportunity Zones because I saw the potential, like the Empowerment Zones of the 1980’s and 1990’s, to have an opportunity to really affect underserved and smaller rural communities…. 

“I believe that this program has tremendous potential and I think that the legislation that we need in order to tweak it would be to provide better safeguards in terms of making sure that it actually is focused and targeted on the underserved and revitalizing those communities and making sure that those communities, actually have a benefit from it.

“In my district alone, we’ve seen the revitalization of a long vacant, American Life building in downtown Birmingham which will soon offer affordable housing. Likewise, we saw the investment in Spelman College, a historically Black college in my district in Tuscaloosa, Alabama. Perhaps what I’m most excited about is that in my hometown of Selma, Alabama, we see Opportunity Zones being utilized to provide renovations and rehabilitation for a beautiful hotel, called the St. James Hotel that sits on the Alabama River, right next to the Edmund Pettus Bridge.” 

Rep. Sewell also talked about ongoing legislative efforts to improve the reporting and accountability requirements associated with Opportunity Zones: 

“The first step to make sure that this program is working as intended is to collect the data about where these investments are going and what their impact is. This is why I’ve introduced bipartisan legislation with my colleague Rep. Ron Kind, as well as Rep. Mike Kelly, to develop and implement strong transparency and accountability measures. We need tools to determine the real-world impact of the program and to ensure that this program is being utilized as intended. 

“Our bill is called the Opportunity Zone Accountability and Transparency Act. I am very proud that it has bipartisan support. The reporting requirements included in the bill will provide the data necessary for legislators as well as the American people to evaluate how opportunity zones are being employed and whether they’re fulfilling the mission of uplifting historically underserved communities. Our bill would require the Department of Treasury to collect data nationally and at the state level, [and obtain] a number of data points: The number of qualified opportunity funds, the amount of assets and the composition of the investments by asset class, the percentage of designated counties and communities receiving the investment and other economic indicators such as job creation, poverty reduction, and new business starts in these designated communities. In addition, our bill would also track the types of investment, who’s investing, what are the type of activities being supported, whether it’s multi-family residential or commercial properties or different economic sectors.

“I believe that our bill will make sure that this investment information is made public within the first year of enactment and so, not only will we provide that collection of this data but we’ll also make sure that there’s transparency to the American people. I believe that this important type of data will enhance the Opportunity Zones and give us a real indication of how the what the true economic impact has been on the communities where we have Opportunity Zones.”

Elaborating on why she decided to collaborate and improve a public policy that has critics on both the left and the right, Congresswoman Sewell said: 

“I always look at the opportunities that legislation has and how I can utilize those tools to really help my district and I believe that many of the efforts to implement and strengthen Opportunity Zones can be bipartisan, like my bill. I believe our shared goal makes it possible and that this important discussion today and the ongoing positive discussions will continue about this issue. 

“I understand the perspectives of my colleagues who have seen substantive concerns about the program. Governors across the country took varying approaches to the meaning of what Opportunity Zones [would be] … One of the things that my Governor did that I also really liked is that we established something called Opportunity Alabama, which is a non-profit that actually helps private investors and these Opportunity Zone funds find projects in our state and that is really a new to the benefit of my constituents. 

“Like I said, I represent Alabama’s 7th Congressional District. It’s Alabama’s civil rights district. It’s my home district. I grew up in this district, but it is also one of the poorest and [it has] the highest unemployment district in the state of Alabama. What I know for a fact, since I’ve been able to live that American Dream is that people in my district deserve better opportunities and more resources. And look what’s possible! I’m a living example of a testimony of what’s possible for my district with those opportunities and I believe that we see these really great projects in my district where Opportunity Zones are making a difference. I believe that we can strengthen it by making sure that we have the collection of the data to be able to show the true economic impact.”

Rep. Sewell offered a Member of Congress’ perspective on the approach of the American Idea Foundation to bring legislators to practitioners on the ground to better facilitate the flow of ideas. 

 “I think that that is exactly what we need to do. I think that when we have an opportunity to visit each other’s districts, we can see that there are so many things that are more similar than differences that are so often highlighted by the press and, sometimes, by our own parties. 

“I think that we have to be able to put party aside and really look at the needs of the people to solve these pressing issues like poverty. I think it’s really important that we go and see these areas and see the potential that lies there. This means being able to identify the needs specific to each community and leveraging the local, state, and federal resources available to really address these issues. We must build flexibility into our economic development incentives to allow capital to flow where the greatest need is….

“I do believe that having an opportunity to get outside of Washington and to really see how people live and to meet people where they are is critically important to the success, not only of Opportunity Zones but all of these incentives that will look to bring public and private partnerships together on behalf of the American people.”

Speaker Ryan summarized why this conversation matters in his concluding thoughts:

“The great promise of America is that the next generation is better off than the previous generation. For too many people in too many communities that promise seems to be breaking. 

“Opportunity Zones have the potential to restore that promise by providing private sector capital to neighborhoods and communities that have been underserved for too long. We’re seeing that success already, and our panelists today are doing the hard work to ensure that the promise of Opportunity Zones is fulfilled.”

The hard work is ongoing to ensure Opportunity Zones mind their mission and are utilized as tools for revitalization and rejuvenation, not gentrification or displacement. By providing unprecedented amounts of investment and resources to help communities build themselves back from the ground-up, Opportunity Zones have tremendous potential. However, that potential will only be realized if lawmakers work collaboratively across party lines and strategically with local leaders and investors. Opportunity Zones cannot and should not primarily be a passive parking space for investors’ capital, rather these tax incentives should actively support the communities and the residents in them to improve outcomes and the overall quality of life in areas that have long been distressed. 

The American Idea Foundation, led by Speaker Ryan, will continue to do its part so this public policy increases opportunities for residents to fulfill their potential and realize their version of the American Dream. 

Speaker Ryan, John Lettieri, & Andrew McKenna detail the long-term vision for Opportunity Zones and what success looks like for Investors and Communities

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By: AIF Staff

Last week, former Speaker of the House and American Idea Foundation President Paul Ryan moderated a conversation with elected officials, on-the-ground community leaders, and researchers about the development of Opportunity Zones. Opportunity Zones, which were part of the Tax Cuts and Jobs Act of 2017, are a poverty-fighting tool designed to stimulate investment and development in economically disadvantaged areas across the country through the use of tax incentives. 

The virtual discussion provided an update on the progress being made and the challenges being faced by policymakers and community leaders as Opportunity Zones have started to germinate. Consistent with the American Idea Foundation’s mission, the panel showcased how Speaker Ryan is serving as a connector between policy makers, policy and analytical experts, and on-the-ground leaders. Joining Speaker Ryan in conversation were: 

  • Congresswoman Terri Sewell of Alabama, who is working to improve Opportunity Zones on Capitol Hill, ensuring they meet their mission of revitalizing communities. 
  • John Persinger, CEO of the Erie Downtown Development Corporation who is currently spearheading the development of a promising Opportunity Zone in Erie, Pennsylvania.
  • John Lettieri, President and CEO of the Economic Innovation Group (EIG), who is adding intellectual analysis and key perspectives on the best practices for those involved with Opportunity Zones.
  • Patrick McKenna of Catalyst Opportunity Funds, who provides analyses for investors so they can maximize the benefit for both businesses and communities in Opportunity Zones. 

The Foundation has included excerpts of all of the panelist’s contributions (Sewell and Persinger) and included below are some highlights from Speaker Ryan’s dialogue with John Littieri of the Economic Innovation Group and Andrew McKenna of Catalyst Opportunity Funds. 

Video of the Virtual Panel is accessible here.

The Economic Innovation Group has provided research, analyses, and recommendations on how individuals, communities, and businesses can achieve the maximum amount of benefits from Opportunity Zones. John Lettieri, shared his perspective on the progress that has been made in Opportunity Zones thus far and what may come next.  

Lettieri urged patience and continued evaluation before definitive conclusions are reached on the impact of Opportunity Zones. 

“It’s important to remember how early on in the process that we still are. It’s easy to forget that, because in legislative terms something that past almost three years ago is long in the tooth. There is often this political timeline that says we should be able to know by now, that we should be able to declare victory or failure or to have some kind of firm assessment. But when it comes to a market-based incentive like this, there is all kinds of market formation and groundwork to be laid before you really get to see what the potential of the policy in the real world looks like.

“It starts with the regulatory piece because investors can’t move forward in confidence, can’t raise capital, can’t deploy capital until the rules of the road are clear and that only just happened in December of 2019. Then they had about three months before the pandemic, so there’s a newness to this in the real world and, as with any new product in a financial marketplace, it takes years to really make that normal… 

“This was always conceived as a decade-plus policy fight for a reason because this is tackling a challenge that did not arise overnight. It is not going to be solved overnight. So, when you want to talk about real results, those need to be measured in decade-plus increments, but we can tell a lot about the design structure and whether those original ambitions and assumptions are proving to be correct. 

“Opportunity Zones were designed to be a very flexible malleable incentive that could be relevant to a wide range of communities and a wide range of needs within those communities. It’s not a type of policy where you have one-size-fits-all use case.” 

Andrew McKenna with Catalyst Opportunity Funds detailed the approach that investors take when evaluating how to make an impact in Opportunity Zones: 

“When we start with a project and we are talking to a developer who has a history of engaging in the community, [the] number one [question] is: Have you talked to the community about what they need? Why is this project important? What are you doing measurably to ensure that you’re going to deliver locally for the community on what you’re promising? 

“And when we show them a scorecard and say: This is how we’re going to measure this project. It is amazing how it aligns everybody’s interests. People are interested in the impact and they say: “I love measurement.” And this is what Congresswoman Sewell was talking about for measuring [impact via] legislation…. 

“We are so committed to the impact and we also have this core belief. I’m a very market-driven impact investor and [believe] that the market return will impact and attract more non-incentivized capital. The point isn’t just to have the Opportunity Zone capital coming in. I expect a 10x follow-on with more capital coming in behind this to engage communities and truly bring up the wealth factors. This is a catalyst. A catalyst to bring more investment behind it so the market rate return is going to track my return. And then our commitment to impact it over a 10-year period. We have the advantage of having a long-term use and when we’re looking at a project having a 10-year view to affordable housing is incredibly powerful to the overall return….

Lettieri also highlighted the diversity of Opportunity Zones across the country and what is needed for them to flourish: 

“Congresswoman Sewell mentioned Opportunity Alabama and what’s happening there. The diversity of types of things you see within those communities is amazing. The fact that an industrial city, like Erie, and rural Alabama are both seeing benefit from this policy in dramatically different ways speaks to one of the early successes of the policy which is that diversity and flexibility that allows it to match with local needs. 

“The second thing we need to see is scale. If you’re talking about a National Map of Places to really make a meaningful depth in the challenge that this was designed to address, you need a lot of capital. This has been one of the things that has hamstrung previous policy efforts. It just didn’t get to scale in getting private activity and private capital off the sidelines at the scale that was necessary….

“Opportunity Zones make deals that would otherwise be not attractive, much more attractive. But for the really, deeply distressed areas, to really do high impact things in those areas you often need even more concessionary capital than what the private market alone can provide. This is a perfect role for philanthropy to come in and provide loss guarantees and backstops to investors that make it less risky to take what is an enormous bet — because remember the tax benefit for Opportunity Zones only comes in for an investor after 10 years of committed capital in an Opportunity Zone investment. That’s a long-time horizon for any investor. That’s not normal for the marketplace. If, on top of that you’re asking them to do deals themselves that are extremely risky or have very low margin, there needs to be other factors that help to mitigate some of the risks that they may perceive if you really want to drive towards the highest impact stuff.”

Lettieri reiterated the importance of having local ambassadors and community leaders on the front-lines to assist investors, developers, and potential job creators locate high impact investments in Opportunity Zones: 

“One thing that we see in almost every successful market for Opportunity Zones is there is somebody coordinating that activity on the ground. This is another way that philanthropy can help fill the information gap that is so much of a hurdle for outside investors or for any anyone who wants to do good in these communities: How do they know what the needs are? Or what the opportunities are as far as where to put their capital? So, you have facilitators in cities like Baltimore, in cities like Norfolk, in Opportunity Alabama’s case in Birmingham and many other places and states where they are playing the intermediary role. This helps to bring in outside capital, attach it to high impact local projects, measure the transparency of it, and make that known to the community and get people on the same page, so these plans that may take 5, 10, or 15 years under normal circumstances can accelerate quite a bit and have a real time impact the lives of local residents We should do legislation, but these types of community partnerships are much more powerful in the long run than anything Congress can mandate of the private sector.” 

Speaker Ryan summarized why this conversation matters in his concluding thoughts:

“The great promise of America is that the next generation is better off than the previous generation. For too many people in too many communities that promise seems to be breaking. 

“Opportunity Zones have the potential to restore that promise by providing private sector capital to neighborhoods and communities that have been underserved for too long. We’re seeing that success already, and our panelists today are doing the hard work to ensure that the promise of Opportunity Zones is fulfilled.”

The hard work is ongoing to ensure Opportunity Zones mind their mission and are utilized as tools for revitalization and rejuvenation, not gentrification or displacement. By providing unprecedented amounts of investment and resources to help communities build themselves back from the ground-up, Opportunity Zones have tremendous potential. However, that potential will only be realized if lawmakers work collaboratively across party lines and strategically with local leaders and investors. Opportunity Zones cannot and should not primarily be a passive parking space for investors’ capital, rather these tax incentives should actively support the communities and the residents in them to improve outcomes and the overall quality of life in areas that have long been distressed. 

The American Idea Foundation, led by Speaker Ryan, will continue to do its part so this public policy increases opportunities for residents to fulfill their potential and realize their version of the American Dream.