With public sector funding for economic development drying up around the country – and in California particularly – it’s never been a better time for economic development organization to look to the private sector for funding. More EDCs than ever are now adopting the model that has long worked for hundreds of their peers nationally – an investment campaign model for funding economic development.
In a nutshell the model works like this, an EDC will: 1) develop a multi-year strategic action plan for growing the economy or addressing major community issues, 2) launch a fundraising campaign to secure multi-year pledged commitments from community stakeholders, 3) focus on implementing the plan, achieving its goals, and in doing so providing a return-on-investment (ROI) to its investors. Then develop a new plan, budget, and goals and secure a new round of funding. Some EDCs are on their fifth or sixth five-year funding cycle, having adopted this model decades ago.
Here are a few key features of this approach:
The overwhelming majority of successful EDCs are public/private partnerships. While it’s important to keep the public sector at the table and to maximize public sector funding, these investment campaigns are primarily targeted toward the business community. It is generally preferable for the bulk of the funding to come from the private sector. When business leaders take ownership of a community’s economic development, operations tend to be more efficient and productive, and the EDC suddenly has a large team of savvy executives actively working to help it succeed.