The Rockefeller Foundation will spend $5.5 million to help cities take advantage of the opportunity zone program created in the 2017 Tax Cuts and Jobs Act. The initiative will give six cities funding for a Chief Opportunity Zone Officer to be embedded in the city government, as well as community engagement specialists who can coordinate investments that will help the community.
Newark, NJ will be the first city in the initiative and will receive $920,000 in funding from the Rockefeller Foundation and Prudential Financial.
Separately, the Mastercard Center for Inclusive Growth and Accelerator for America announced they will partner to help direct opportunity zone investment to distressed communities. The partnership includes an $850,000 grant from the Mastercard Impact Fund, as well as data science work, economic development tools and research.
The opportunity zone program allows investors to get a tax break if they put money into certain businesses and properties in “distressed” areas selected by the state and federal government. More than 8,700 census tracts have been designated as “opportunity zones,” and the Rockefeller Foundation estimates there is more than $6 trillion in unrealized capital gains that could qualify for investment there. However, there’s been concern that the benefits of the investments might only be felt by developers, or that investors might focus their money on gentrification or real estate projects rather than businesses that could foster the community.
That’s the problem the Rockefeller Foundation seeks to solve, by giving cities funding and human resources to integrate opportunity zone planning into government. The hope is that having a designated engagement team can ensure that the community gets a say in how opportunity zone funds are spent.
Mastercard Press Release
The Mastercard Center for Inclusive Growth and Accelerator for America (AFA), a non-profit consortium of mayors, labor and business leaders, and urban and economic development experts, today announced a unique partnership to combine their expertise to drive inclusive investment in distressed communities across the United States. The announcement was made at the first Forbes Opportunity Zones Summit in Newark, NJ.
The partnership includes an $850,000 philanthropic grant from the Mastercard Impact Fund to help the Accelerator realize its goal of helping 50 city leaders and their communities maximize the potential of the federal Opportunity Zone incentive. Additionally, the Mastercard Center for Inclusive Growth will provide in-kind support in the form of data science expertise, economic development tools and research to help city leaders make evidence-based decisions.
Together, the partnership will provide community leaders across the country with: Data-driven insights around the current economic activity in their Opportunity Zones; assistance in building an Investment Prospectus through the Accelerator’s toolkit; consulting on how to structure and mobilize inclusive investments; analysis of unmet needs for investment potential; and ways to measure progress over time.
“We are likely to get better outcomes if we start with better inputs,” said Shamina Singh, Founder and President, Mastercard Center for Inclusive Growth. “That’s why we are working with Accelerator for America, to ensure city leaders can better prove the investment value of their neighborhoods and build cases to attract investments that will fulfill the long term needs of the local community. For Opportunity Zones to have the greatest chance of impacting those who need it most, we do need art but we also need a lot more science.”
“This partnership with the Mastercard Center for Inclusive Growth is a powerful show of confidence in the Accelerator’s mission to drive national change through local solutions — from the bottom, up. Mastercard’s support and deep insights into the economic power of people living in the Zones will provide key data to help local communities steer Opportunity Zone capital into inclusive, transformative investments,” said Accelerator for America CEO Rick Jacobs.
“To assure that Opportunity Zones will truly create opportunity, cities must take informed action. Mastercard’s partnership with Accelerator for America will connect cities with the in-depth data they need to make strategic decisions that will deliver big for their underserved communities,” said Los Angeles Mayor Eric Garcetti, who chairs the Accelerator’s Advisory Council.
Communities across the United States are beginning to mobilize around Opportunity Zones, economically-distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment. Accelerator for America is working closely with city leaders to help maximize this unique opportunity by providing expertise, training and tools to level the playing field between the public and private sectors.
As a philanthropic partner, Mastercard is bringing a new dimension to the discussion through its data science expertise, which helps city leaders identify patterns of spend, based on aggregated and anonymized transaction data, to deliver a timely view of the economic activity taking place in Opportunity Zones and understand potential unmet needs of the community. For example, Mastercard’s data driven insights can help identify neighborhoods where spend on groceries is rising but most of that spending occurs in other parts of the city because no grocery store exists nearby.
This is the first of a series of grants from Mastercard supporting inclusive economic development across the U.S.
About the Mastercard Center for Inclusive Growth
The Mastercard Center for Inclusive Growth focuses on promoting equitable and sustainable economic growth and financial inclusion around the world. As a subsidiary of Mastercard, the Center leverages the company’s data, expertise and technology, along with administering the Mastercard Impact Fund’s philanthropic investments, to empower a community of thinkers, leaders and innovators on the front lines of inclusive growth. For more information and to receive its latest insights, follow the Center on Twitter @CNTR4growth, subscribe to its newsletter and visit www.mastercardcenter.org.
About Accelerator for America
Accelerator for America launches and replicates local initiatives to improve people’s lives in communities across the country to create national change from the bottom up. The Accelerator developed the “Investment Prospectus” tool to help local communities partner with the private sector to steer capital toward investments that deliver a return for investors and local residents. Opportunity Zones could attract $100 billion in capital.
The Accelerator is also working with local governments across the country to generate local infrastructure revenues instead of relying on the unmet federal infrastructure promise. An example is Los Angeles County’s Measure M, which was approved in November 2016 and generates $120 billion and 465,000 career jobs. On that same election day, which also elected Donald Trump to the White House, local governments nationwide approved $230 billion in local infrastructure improvements.
Rockefeller Foundation Press Release
The Rockefeller Foundation today announced an initiative to help U.S. cities attract responsible private investment in economically-distressed communities through Opportunity Zones created in the 2017 Tax Cuts and Jobs Act. This effort will help ensure new investment delivers sustainable benefits for more than 30 million low-income Americans living in Opportunity Zones.
Through the initiative, six cities will receive financial and human resources support for two years. Support includes funding for and designation of a Chief Opportunity Zone Officer, embedded in city government or city economic development agencies. It also includes funding for two community engagement specialists to support and facilitate community engagement and involvement in the proposed Opportunity Zone projects and businesses.
Newark is the first city selected, and will receive $920,000 in co-funding from Prudential Financial and The Rockefeller Foundation, working through the Newark Alliance, which has a commitment to equitable development. The other five cities will be announced over the next few months.
“The only way to make sure the ‘opportunity’ in Opportunity Zones benefits all Newark residents is to intentionally focus resources to ensure it happens,” said Mayor Ras Baraka. “I am so pleased that through the support of our longtime partner in progress, Prudential, Newark was able to be the first city in The Rockefeller Foundation initiative.”
“Prudential is committed to maximizing the potential impact of the Opportunity Zone program to spur catalytic investments in our hometown of Newark, New Jersey. By providing capital, as well as our expertise from our other Newark redevelopment and Opportunity Zone projects, we will help close the gap between inequality and opportunity as the city grows,” said Lata Reddy, senior vice president of Diversity, Inclusion & Impact, Prudential. “Our partnership with The Rockefeller Foundation is a crucial step toward ensuring that inclusive, responsible investment benefits all Newark residents and communities.”
“Opportunity Zones have the potential to unlock billions of dollars in innovative job creation and community infrastructure private investment in cities, lifting up Americans who most need this support and preventing their displacement by irresponsible development,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation. “Philanthropy has an important role to play in ensuring opportunity zones improve the lives of the residents in distressed communities. Starting with Newark, The Rockefeller Foundation will help empower communities to attract and implement investments that will provide real economic mobility to the greatest numbers of disadvantaged people.”
This initiative aims to make it easier for cities to attract and responsibly deploy some of the more than $6 trillion of unrealized capital gains which could qualify for investment in Opportunity Zones. In addition to funding the Chief Opportunity Zone Officer position and two community engagement specialists, each city will also receive two years of support in the form of a national Opportunity Zone Technical Assistance team to compile and leverage local, state, and federal incentives, and help structure and support deals.
The initiative launched today is part of the Rockefeller Foundation’s U.S. Jobs and Economic Opportunity program focused on expanding economic opportunity for low-income Americans through policy, partnership and place-based transformation.