JPMorgan Chase, an American investment bank, has announced its AdvancingCities programme to spread economic opportunity in cities in the United States and across the world.
The US$500 million, five-year initiative to drive inclusive business growth will combine the firm’s lending investment, its philanthropic capital and expertise to invest in cities. A portion of the amount consists of up to US$250 million in long-term, low-cost capital, and the bank says it expects to leverage an additional US$1 billion in outside capital. All together, a total of US$1.5 billion will be used to fund sustainable projects in neighbourhoods that do not have access to affordable housing, commercial real estate and small business loans.
Speaking at the launch, Peter Scher, Head of Corporate Responsibility, JPMorgan Chase, said: “Too many neighbourhoods [in the US] are struggling from disinvestments. The consequences of this are profound. This is the story that is frankly defining our times. The private sector must step up and take action.”
The initiative is based on the firm’s impact model for cities including Detroit, Chicago and Washington DC. As part of its programme, the firm will invest in cities where it says “conditions exist to help those who have not benefited from economic growth”. In 2015, JPMorgan and the WK Kellogg Foundation launched a US$6.5 million lending programme, named the Entrepreneurs of Color Fund, to help Detroit businesses owned by minority entrepreneurs. The vehicle, part of the Detroit Development Fund, is designed to provide financing for general contractors, small retailers and other neighbourhood service businesses.
“[In Jefferson-Chalmers], we opened a restaurant where two third of the employees are from the neighbourhood,” said Mike Duggan, Mayor of Detroit, who was invited to speak alongside Ashley Swearingen, Mayor of Fresno and Michel Nutter, former mayor of Philadelphia at the launch.
“This is the kind of inclusivity you can produce when you have public-private partnerships.”
Successful proposals for the AdvancingCities challenge must incorporate at least two areas of focus within JPMorgan Chase’s model. This includes supporting existing local coalitions of elected, business and non-profit leaders to “address major social and economic challenges such as employment barriers, financial insecurity, and neighbourhood disinvestment”.
Nutter said that almost all recent success the city has had has been based on partnerships between the public and private sector.
“There’s a government language and a business language,” he said. “Both often speak English, but they are different dialects. What AdvancingCities is about is that level of collaboration between cities around the world that will make all the difference.”