Philadelphia’s 5th District City Council Race: A Call For A Town Hall on Social Impact Investing

The image above was taken at a fall 2017 protest at the ribbon cutting for the Vaux Big Picture School in the Sharswood neighborhood of North Philadelphia, a HUD “Choice Neighborhood.” The middle school was closed for several years and reopened under the management of a private operator (though titularly still a “public” school). Big Picture is an international franchise and partner in the first education social impact bond in the UK. Additional information on the Doncaster / Big Picture SIB available at the Innovation Unit, UK website here. What is taking place in the 5th City Council District of Philadelphia is part of a much larger move towards the global financialization of public services, including education. It is imperative that we talk about this.

The 5^th Council District of Philadelphia embodies economic inequality. Extending from North Philadelphia, a bastion of Black culture battling an onslaught of post-redlining gentrification, to Rittenhouse Square, a district of penthouse views and high-end retail; it contains neighborhoods where parents can raise $100,000 to pay for extras that have been cut from school budgets AND Black and Brown communities where most of the neighborhood schools have been closed or taken over by charters.

It runs east from the Rocky statue, through Spring Garden, Yorktown, and Northern Liberties, ending in the hipster enclave of Fishtown. “Investing in Opportunity Zone” census tracts spread across Brewerytown, along East Fairmount Park, and up North Broad Street (interactive map here, zoom in). Real estate development and new businesses launched within these zones and held for ten years pay NO capital gains tax upon sale. Temple University exerts a powerful influence over the northern part of the district, its overreach resisted for decades by vigilant community activists, the most recent wave led by Stadium Stompers and the No Stadium, No Deal Coalition.

It is a district of gourmet food halls and food deserts; unsheltered people dying in underground corridors of transit stations a stone’s throw from high-end coffee kiosks; row homes left to disintegrate by absentee landlords and vacant luxury lofts purchased by overseas investors. The district is a study in contrasts: the Comcast world headquarters/the John Coltrane House, City Hall/Church of the Advocate. It contains seats of power and sites of resistance.

I’m a registered voter in the 5^th District and have been for 21 years. Almost that entire time my city council representative has been Darrell Clarke. A long time aide to former Mayor John Street, Clarke took over his mentor’s seat in 1999 and has served as President of Philadelphia City Council since 2012. The 5^th District seat has been contested on occasion, but it takes considerable resourcefulness and/or resources to go up against Clarke.

Two challengers, thus far, have filed paperwork indicating their intent to secure spots on May’s primary ballot. In the resourcefulness corner is Sheila Armstrong, a community activist for the underserved and former legislative aide who now lives in PHA housing and intends to run a campaign lifting up concerns of low-income people in the district. In the resources corner is Omar Woodard, executive director of the venture capital-backed GreenLight Fund and former policy advisor on Pennsylvania State Senator Anthony Hardy Williams’ mayoral run. Williams, of course, is a well-known advocate of education privatization.

Woodard, a graduate of Girard College, attended George Washington University where he completed a BA in International Affairs and MPA in Non-Profit Management, building strong ties to the university’s trustees as head of the student association and later as an administrative fellow. His background as a lobbyist, healthcare consultant, venture capital analyst, and political operative combined with the GreenLight Fund’s deep-pocketed national network, means his campaign is positioned to tap into a network of influential contacts.

GreenLight was created by Boston venture capitalist and former medical entrepreneur John Simon in 2004 in partnership with Margaret Hall. Simon previously started a college prep program called the Steppingstone Foundation modeled after New York City’s Prep for Prep initiative. He and friend Michael Danziger spun out several satellites, including the Steppingstone Scholars program in Philadelphia before hitting a wall. Simon decided rather than building programs from the ground up, it would be more cost-effective to establish social investment incubators to bring “evidence-based” interventions to scale. It was a decade before the original Boston office launched its first outposts in Philadelphia and the Bay Area. Additional offices have since opened in Detroit, Kansas City, Cincinnati (Strive/Knowledgeworks), Charlotte, and Atlanta. GreenLight’s national portfolio, seen here, features organizations offering health system text messaging, home visits, mentorship, college advising, and school and professional development “turnaround” services.

Partners in Simon’s original Boston office are featured in the map below. I hope to write this up in greater detail, but for the purposes of this post I want to point out the involvement of the Tudor Foundation and James Pallotta, who worked for hedge fund trader Paul Tudor Jones for many years. Tudor Jones, founder of the Robin Hood Foundation, collaborated with fellow hedge fund manager Stanley Druckenmiller for two decades refining impact metrics for “poverty solutions” within the boundaries of the Harlem Children’s zone. They then dispersed the program nationally through Geoffrey Canada’s consulting arrangements with hundreds of Promise Zones. For more information on how outcomes-based finance is linked to privatized social services see this series of posts.

Tudor Jones was one of the initial backers of Robert Dugger, James Heckman, and Arthur Rolnick’s “Investing in Kids” Working Group, putting a million dollars into their pre-k investment plan way back in 2005. Those efforts eventually led to the ReadyNation Global Business Summit in New York last November where, after ringing the NASDAQ bell, the venture capital crowd proclaimed the early-childhood education and workforce training impact sectors open for business (more here). Bottom line: there is a lot of money and program infrastructure behind the GreenLight Fund.

Interactive map of GreenLight Boston here.

It will be interesting to see how the three candidates navigate this landscape of haves and have-nots in the coming months: the incumbent, the spokesperson for the poor, and the social entrepreneur executive. The wealth gap in the 5^th District has increased significantly over the twenty years of Clarke’s tenure. As enhancements to affluent and gentrifying sections have been made, often with assistance from public-private partnerships, neighborhoods like Strawberry Mansion continue to suffer. Some have been subjected to catastrophic urban renewal tactics, such as Sharswood/Blumberg, a HUD “Choice Neighborhood” where over a thousand properties were seized through eminent domain.

A pressing question when strategies to “ameliorate” poverty are proposed is whose voices take precedence? Who holds the power? Who calls the shots? Whose lives hang in the balance? Are the interests of a mostly white elite class being advanced as the rights of under-served Black and Brown people are undermined? When deals are done, are they arranged behind closed doors? Is the public brought in at the last minute for a perfunctory consultation, just to maintain appearances? Candidates for this council seat need to realize residents of the 5^th District are paying attention and, as shown by the No Stadium, No Deal Coalition’s considerable success, are prepared to mobilize and fight for solutions that put community needs first.

No more closed-door meetings. The image above is from a January 2018 protest staged outside Girard College as Chamber of Commerce members gathered at a closed-door reception to discuss the role of Philadelphia’s business community in schools. Details in this post, “Last Night We Lay Down In The Street.”

I draw your attention to a map I created of advisors to the Philadelphia’s GreenLight Fund. This is not all of them (for a complete list follow this link), but it shows how the various interest groups interlock to drive the impact agenda forward. Ultimately, the system is meant move venture capital (left side), betting on the lives of poor people who are compelled to perform and deliver data for the deals. There are ancillary industries that will benefit financially: tech and telecommunications companies that provide infrastructure; law firms drawing up “pay for success” contracts; and consultants evaluating the deals. It is a system that requires cooperation from elected officials, foundations, non-profits, pseudo-governmental bodies, media cheerleaders, and higher education. All of these interests intersect at GreenLight. All are part of Woodard’s network.

Interactive map of GreenLight Philadelphia here.

Poverty is a critical issue in Philadelphia and the 5^th District. Venture capitalists, many of whom live outside the city, see deep poverty as a prime business opportunity. Our city is poised to become an experimental laboratory for “innovative” financial schemes promoted through Wharton’s alumni network. In the near future, proposals will be floated for outcomes-based, pay-for-success government contracts tied to “measurable social benefits.” The Reinvestment Fund, represented by Andy Rachlin on the GreenLight Fund’s advisory council, has a whole webpage outlining how these deals are structured. Mind you, the Reinvestment Fund funded the “Welcome Home” SIB in Santa Clara County, the one with Palantir doing the data evaluation! And now Project Home is taking part in a pilot PFS program for supportive housing with help from the Social Innovation Fund. Hmmm…. Opportunity Zones are a major area of interest as seen on the preliminary agenda for the second annual Total Impact conference planned for May 1-2, 2019.

Yes, communities need resources, but at what cost? We need public funds supporting the public good, not private “investments” that perpetuate continued outsourcing and narrowed service delivery. Impact “solutions” pose very grave dangers to those most in need of help. This economic model is designed to run on Big Data and predictive profiling. The lives of poor people, our fellow citizens, are being conscripted to fuel it. Offers of “help” will come with “digital strings,” attached; download an app, fill in this online form, allow your data to be harvested without recourse, accept behavioral regulation. Remember, it’s all being factored into your “hustle-score.” This is no joke.

The screenshots below are from the website of the Family Independence Initiative. The organization has ties to New Profit and is part of the GreenLight Fund’s national portfolio, though it is not in Philadelphia yet. It seems like something straight out Boots Riley’s “Sorry to Bother You.” Such hubris, compelling families to upload personal details of their “income, savings, health, education, housing, leadership, and connections” to the “UpTogether” software platform, so they can “take control of their own success” through the wonders of data analytics and profiling. It is Orwellian; it is horrific.

What does Omar Woodard’s arrival on the political scene portend? Is this a sign the region’s social impact investors are ready to take their game to the next level now that the Foundations in Evidence-Based Policymaking legislation and Investing in Opportunity Zones are in place? It is important to assess Woodard’s bid within the context of the region’s broader social impact landscape, one that stretches from the Rockefeller-funded B Lab in Berwyn, where the impact metrics that underlie this new market were created; to Penn’s campus in West Philadelphia where research into finance, behavioral economics, social science and impact investing are being carried out; and down to the Navy Yard in South Philadelphia where Ben Franklin Technology Partners is providing capital and support to industries designing the tech that will capture and visualize the data to run these new financial markets.

Woodard has led the Philadelphia satellite of the GreenLight Fund since 2016, the year ImpactPHL went public with its plans to create a “safe point of entry” for venture capital and local foundations to acclimate themselves to social impact investing. Tony Abraham’s article in Generosity, “How the heavy hitters behind the newly formed ImpactPHL want to revolutionize capitalism,” states key players spent two years “behind closed doors” getting ready. Of the eight founding members, six were white men. Those most often targeted for social impact interventions? Yes, people of color. That power dynamic must not be overlooked.

Source

The map below shows the people, organizations, and companies aiming to make Philadelphia a “pioneer in impact investing.” Two of the individuals, Richard Binswanger of Clearview Group, and Maari Porter of the Philanthropy Network of Greater Philadelphia, served on the advisory board of Philadelphia’s GreenLight Fund.

Interactive version here.

According to the Economy League of Philadelphia’s 2016 whitepaper, our region is a prime candidate to become the next “Silicon Valley” of the impact economy because: 1) our history of public-private partnerships dates back to Ben Franklin; 2) we enjoy a great location between New York’s money and Washington’s politics; 3) our wealth managers are really interested in innovative finance (Wharton); 4) professors here are eager to carry out supporting research and evaluations; 5) there’s a large pool of potential customers (read desperate governments starved of public funds) seeking “new solutions;” and 6) receptive government officials have already authorized pay for success and benefit corporation legislation.

But really, Philadelphia is poor. Many are barely surviving deep poverty. By asserting a “doing well by doing good” refrain, the haves intend to turn this grim reality to their advantage, branding poverty-mining the have-nots as a charitable act. So by way of disrupting this framing I hope you will consider the following questions:

How many residents know about “Growing the Impact Economy in Greater Philadelphia?”

And are we on board with this? Because it seems there should be discussion beyond ImpactPHL, the B Lab, and Chamber of Commerce before proceeding, right?

What would it mean for Philadelphia to become a leader in a predatory investment sector that rewards venture capitalists for imposing data-driven solutions on poor communities? That’s not something to be proud of.

In this city of “brotherly love,” does anyone believe it’s ethical for the rich to view the poor as human capital investments?

Why are the human beings who will be caught in the crosshairs of this new system of innovative finance not being consulted? How comfortable are they turning over the data of their lives to third party evaluators so the wealthy can pile up more money?

Do we expect targets of “impact” interventions, real people with real problems, to welcome social entrepreneurs with open arms?

Do we want to build a tech sector around monitoring and predictively profiling marginalized populations through “smart” infrastructure?

Don’t the scalable solutions proffered by venture philanthropy generally sidestep thorny issues of structural racism embedded in Philadelphia’s past, favoring individual fixes over systemic restructuring?

When did investors ever create a market designed to self-extinguish? Never.

Social impact investing will only reinforce austerity budgeting, privatization, predictive profiling, surveillance, and more poverty.

We must talk about this Philadelphia. We need to drag all of this out into the open and have a very frank conversation about what it really means for Philadelphia to be the “Silicon Valley” of impact investing. Poor people HAVE to be active participants in this conversation. They have the right to know about the data profiling tied to impact investing and “smart city” infrastructure being rolled out in Silicon Valley and what it could mean for their futures.

I am calling on Darrell Clarke, Sheila Armstrong, and Omar Woodard to convene a town hall this spring to begin to unpack the intersecting issues of social impact finance, outcomes-based contracting, Big Data government, and “smart” city (surveillance) infrastructure. Enough with the closed door meetings.

If you need help getting it set up email me.