July 21, 2011
Private: Sick of Food Deserts? Try California FreshWorks -- and Have Some Jobs on the Side
California FreshWorks Fund, food deserts, job creation, Michelle Obama, obesity, poverty
By Mary Kelly Persyn, Associate, Ramsey & Ehrlich
On July 19, first lady Michelle Obama announced the launch of the California FreshWorks Fund, a $200 million public-private partnership to provide financing to food retailers and distributors willing to locate in food deserts. Spearheaded by The California Endowment (“TCE”), a private, statewide foundation with a public-health mission that it interprets increasingly broadly, the Fund pulls together an impressive array of banks, philanthropies, industry players, government agencies, and investors under the umbrella of healthy food.
Why food, and why now? Food deserts -- areas without access to healthy, fresh food, namely grocery stores, but usually with abundant access to unhealthy fast food -- are disturbingly common attributes of lower-income neighborhoods. Across California, four million people live in food deserts, which correlate with higher rates of obesity, heart disease, high blood pressure, and diabetes than areas with grocery stores. I’ve written previously in this space about the unhappy cohabitation of racially isolated poverty and diminished access to healthy food. And we can little afford such poor healthy food access now, when our nation faces a tsunami of obesity and its attendant costs in health care and economic productivity. As TCE Director of Community Health Marion Standish and I wrote here last week, the increasing rate of childhood obesity threatens to wreak even more havoc in future years as obese children become obese adults. And we know that access to healthy food decreases the risk of obesity.
But that’s not all. California FreshWorks and initiatives like it bring more than fresh food to underserved communities: jobs, increased property values, and increased tax revenue roll into town too. And that’s why healthy food financing initiatives are precisely the right thing to do now, in the face of a sluggish economic recovery, including a stubbornly weak job market. On average, 24.3 new jobs are created for every 10,000 square feet of retail grocery space (grocery stores are usually 20,000 to 50,000 square feet in size). A similar initiative in Philadelphia resulted in a 4 percent to 7 percent increase in property value, along with further commercial development. And increased retail, employment, and property value means increased tax revenue.
While food deserts are often densely populated, meaning significant block-by-block income (though not per-capita income, the more usual measure) waiting to be spent in area stores, the high cost of entering food deserts has long deterred retailers -- even though grocery stores in food deserts can become profitable. The Fund provides loans and some grants to retailers to help overcome this barrier to entry, with longer time horizons for payback so retailers can, over time, generate the necessary level of sales to be profitable.
The Fund, though it draws on philanthropy for some of its funding, is not itself a charitable endeavor traditionally conceived. This is Philanthropy 2.0 -- a highly networked and intensely collaborative effort that seeks robust, lasting, large-scale change. (Interested in new approaches to large-scale philanthropic efforts? FSG Social Impact Consultants founder Mark Kramer’s work on Catalytic Philanthopy and follow-on book, Do More than Give, with Leslie Crutchfield and John Kania, are must-reads.) The Fund is in the business of investing in communities, and its industry partners and investors intend to make a profit -- but the initiative only reaches its objective if a healthy share of that profit remains in the community in the form of jobs and increased tax revenue. Keep your eye on this program as it goes to work on one of the nation’s toughest problems in a big, diverse, and economic crisis-ridden state. The combination of public health improvement and economic revival could be a tempting recipe.
Read more about cross-sector approaches to improving public health and education and fighting poverty from my blog, Nothing Works...But Everything Might.